Hello @techtoolsqtpie
Thanks for posting this in the Canvas Community!
I understand you are seeing some issues with adding observers to courses. Without being able to take a look at the specific course and such, I would not be able to say 100% what is causing this.
Off the top of my head, I suspect that it might be a permission issue possibly. If you have an account role, there might be something going on with the specific role you are assigned as in the account or sub account. With account roles, there are permissions that apply to all of them. If you are an account admin and have all admin permissions you should be able to do this without any issues. If you have an account role but are not an account admin, your permissions might be a bit restricted fro what you can and can't do in the account.
You can check with your schools account admin to see if there is a permission causing this to happen. You can also contact canvas support to have them look into the permissions for your account role.
Hopefully this helps a bit!
-Colton