fresco
JLNobody has made some interesting points, but I'll add
The objective reality isn't formed from the emergence of the "observer" and "observed", it's the same old objective reality that was there all along. What changes is the awareness shifts from being confined and identified with the body/ego and becomes nonlocal, (which apparently is the state it's always already in). In this nondual state the awareness/consciousness not only ?'observes' but also IS what it observes. The "observer" and the "observed" disappear and as JL has said all there is is observing, no objects, nouns or things, just verbs or process.
It's a radical transformation from the personal ego perspective because it is the ego's death; the ego is revealed for what it is, a fiction. So there really is no death, but maybe a hell of a shock,...
There's no infinite regress because there never was an observer, which is to say, awareness cannot be observed and therefore transcends the manifest (the world of observables); awareness is one with it's observations yet transcends them,
. nondual.