sometimes observers don't produce pulse signals when pushed together by pistons. To reproduce, get these blocks:
2 observers
11 redstone dust
1 sticky piston
2 solid blocks (I used white concrete)
1 redstone lamp
build the contraption like provided below, and put a redstone dust in the middle of the two observers. There, you get two inactive observers.
comparison between regular and bugged on the left.
Edit: Maybe this is WAI, but I really don't get why the observers don't observer the other observing observer. When i place the redstone, they both update, and when the piston pushes, they should both get updated again. Is it because it happens too fast that they don't update?
This redstone contraption is working as expected. When the two observers are pushed together, they are both activated for exactly 2 game ticks. By the time they are both facing each other, they are both not activate meaning the other observer has nothing to observe.
Basically; there's no reason the two observers should be stuck in a loop in this specific scenario.
Here is a video showcasing that by freezing the tick rate:
[media](Notice at the end how they are both inactive)