The bug
If lava is at the same height as a flamable block (e.g. a sign) on top of soul soil, blue fire is placed above. Even if the location is not valid for fire.
How to reproduce
Place lava
Surrounding the lava place at the same height signs with soul soil below
Increase the
randomTickSpeedgamerule if necessary
❌ Blue fire is created above the signs even though this location is not valid for fire
Cannot reproduce.
Best guess as to what's happening here: the lava is setting the crimson roots on fire (somehow). The observer detects this and causes a block update, which causes the fire to 'realise' that it's in a position that doesn't make sense (fire on a non-solid block shouldn't happen), and so it extinguishes.
What I don't understand is why those roots are getting set on fire in the first place. This hasn't happened for me, both with and without the observer present.