A visual observer is optional under Part 107, and an ordinary flight does not require one. If you use an observer, §107.33 requires effective communication, the ability to see the aircraft as §107.31 describes, and coordination to scan the airspace and keep awareness of the aircraft. The remote pilot in command remains the final authority under §107.19.
The rule
Section 107.33 has three duties, and all of them apply whenever an observer is used. The remote pilot in command, the person manipulating the flight controls, and the visual observer must maintain effective communication with each other at all times. The remote pilot must ensure that the observer is able to see the unmanned aircraft in the manner specified in §107.31. And those same people must coordinate to scan the airspace where the aircraft is operating for any potential collision hazard and to maintain awareness of the aircraft's position through direct visual observation.
Section 107.31 is the seeing standard the observer has to meet. With vision unaided by any device other than corrective lenses, the observer must be able to see the aircraft throughout the flight in order to know its location, determine its attitude, altitude, and direction, observe the airspace for other traffic or hazards, and determine that it does not endanger life or property. Section 107.31(b) says that ability is exercised throughout the flight either by the remote pilot and the person on the controls, or by a visual observer. The observer can be the person exercising visual line of sight. Section 107.31(a) and AC 107-2A paragraph 5.9.2 still require the remote pilot and the person manipulating the controls to be able to see the aircraft even then.
The observer's primary job is practical: keep the aircraft and the surrounding airspace in sight, and alert the remote pilot to hazards and traffic. Holding the remote pilot certificate for the flight is not that job. Repairing the aircraft in flight is not that job. Taking the controls because the pilot looked away is not that job. Crew resource management can include an observer as a resource. It does not move §107.19.
How to apply it
Brief the observer before launch. Cover who speaks first when traffic appears, what "well clear" means for this site, and how you will hear each other if the wind or the client is loud. Effective communication fails when the observer is around the building with a dead radio. Place the observer where the aircraft, the arrival path, and the wires are actually visible. If you are the person on the controls and you also want to glance at the screen, the observer's scan is useful only while you remain able to look up and see the aircraft yourself.
Goggles are the case that makes the option feel mandatory. They are not. You may fly without an observer when you can see the aircraft directly. If you use an observer so you can wear first-person-view goggles, the observer must keep unaided visual contact with the aircraft. You and the person on the controls must still be able to see it, for example by lifting the goggles. An observer assigned to the controller screen does not satisfy §107.31. Goggles and screens do not themselves satisfy visual line of sight. The details of that setup are on the FPV goggles page, and the seeing standard is on visual line of sight.
A tower inspection with a second set of eyes
You are inspecting a cell tower beside a road that also has helicopter traffic. You can see the aircraft, so the regulation does not require an observer. You bring one anyway because the scan is busy. You agree that the observer calls traffic and wires, you acknowledge, and you keep the aircraft in sight while you frame the shot. The observer does not hold your certificate, does not fly the missed approach, and does not "own" see-and-avoid while you watch the screen. If a helicopter joins, you yield. The observer's call is how you heard it sooner. The decision is still yours.
If the plan changes and you put the goggles on for a tight orbit, the observer's eyes have to be on the aircraft, not on a tablet. You lift the goggles often enough that you can still see the aircraft. Section 107.33 does not transfer your responsibility during that orbit.
The trap
The role question offers two promotions the observer never receives: taking control when the remote pilot is distracted, and assuming see-and-avoid so the remote pilot is relieved. Under §107.33 the observer must be able to see the aircraft and maintain effective communication and coordination so the crew can scan and track position. The observer does not assume any of the remote pilot's responsibilities.
The second item says that using an observer transfers see-and-avoid away from the remote pilot, or that an observer satisfies §107.31(a) so the remote pilot may be unable to see the aircraft for the whole flight. A visual observer is optional. Section 107.31(b) lets the observer exercise visual line of sight, which is how goggles can be used. The remote pilot and the person on the controls must still be able to see the aircraft. The third item offers certificate custody or in-flight repair. The observer's role is sight and a traffic call.
Practice the duty split on the free practice test. The course treats the observer as a crew resource who never becomes the final authority.