An Observer attached to a sticky piston normally gives off a pulse right after being moved. If the sticky piston is spammed rapidly however, the Observer can get stuck in a permanent on-state. This happens most consistently when the piston goes from extended to retracting then back again to extended in very quick succession.

In the stuck-on state, the Observer does not react to updates anymore no matter how it is moved or updated. It can only be reset by destroying and replacing it.

Edit: This is likely related to MC-107662, MC-107689 and MC-107689.