What does "Traffic Observed" inform the issuing controller?

The term "Traffic Observed" communicates to the issuing controller that the aircraft has successfully identified the traffic in question and is taking appropriate actions based on that information. This includes the indication that any necessary restrictions and separation requirements will be adhered to in order to maintain safe operations. It confirms effective situational awareness, enabling the controller to anticipate potential conflicts and ensure compliance with relevant air traffic control protocols.

In contrast, the other options relate to different situations: unidentified traffic or limitations in communication or radar coverage, which do not accurately reflect what is conveyed by the phrase "Traffic Observed." This term specifically denotes the active acknowledgment of traffic, thereby ensuring operational integrity and safety.