The Observer is a floating camera that can be used by use of the PossessEntity Observer console command. It flies through the air or underwater, using the same code as aquatic creatures for its maneuvering, except with altered stats such that it feels like noclipping. It does collide with terrain and other obstructions. It cannot interact with the rest of the world in any way except to observe.
The player can get a front row seat of any other player on the map by pointing the camera at the creature of interest.