Observers participant node is down

I think of signatory as having a strict consistency model and observer as eventually consistent.

Or in CAP theorem terms, we always want Availability, so signatory gives you Consistency but isn’t Partition-tolerant, and observer is Partition-tolerant but not Consistent.

Even though there are no strict consistency guarantees on observer you will get confirmation from their node eventually via the ACS commitments (see my forum question on this topic)