Well, I'm not so sure if this is a bug or not, but when the Observer Squad uses it's Flare ability, the guy
throws the flare. The ability icon shows a flare gun (or, at least, what it's supposed to be

).
And it's also got an extremely small range, only within it's sight. So, maybe a buff? The Flare reveal radius is already small enough, which is fine enough since you can see into the FoW as well as seeing camo units. The range might need something.