Electrical fault noticed with restricted observation? (5-7)

I believe the answer is:

short-sighted

'with restricted observation?' is the definition.
(short-sightedness restricts vision)

'electrical fault noticed' is the wordplay.
'electrical fault' becomes 'short' (a short circuit).
'noticed' becomes 'sighted' (I've seen this before).
'short'+'sighted'='SHORT-SIGHTED'

(Another definition for short-sighted that I've seen is " Myopic".)

I've seen this clue in The Telegraph.

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