Your Screen is Being Observed on Mac
**** Please, note: any Application that requires access to Camera or Screen Sharing/Recording in System Preferences >> Security & Privacy >> Privacy tab can potentially cause this issue.
This is a list of some common Apps that require access: Zoom, Teams, Meet, Chrome plugins, Firefox plugins, and QuickTime screen recording
Check Privacy tab to see which Apps have access to Camera and Screen Sharing/Recording, then follow-up with user about last time using any of these apps.
1. Are you recording the screen on your Mac?
If you are recording your Mac’s screen, this message will be displayed on the Lock Screen. Your screen recording will continue when you lock your Mac or put your screen to sleep in macOS. And this message will be displayed indicating your screen is being recorded.
There are multiple ways to record the screen. The built-in options include:
2. Are you sharing your screen?
You can share your screen remotely or locally. If your screen is being shared, then this message will be displayed. If you are not sure, you may want to check your settings.Open System Preferences, click Sharing.
3. Are you using AirPlay?
If you are using AirPlay to stream video or mirror your Mac’s screen to your Apple TV or AirPlay 2-compatible smart TV. If this is the case, once you stop the mirroring, this message will disappear. Here is how you can do this:
You can click the AirPlay icon (which looks like a computer monitor) in the menu bar, then choose Turn AirPlay Off.
Or alternatively, you can go to System Preferences > Displays and select Off from the AirPlay Display drop-down menu.
See also: AirPlay Not Working?
4. Third party apps
Some third-party apps may cause this issue. Some apps may require you to permit “Screen Recording” in order to function properly. For example, some popular apps like Zoom, Google Meet, Teams and DisplayLink need this permission. You can check your screen recording permissions by using the Privacy pane of Security & Privacy preferences. Here is how:
On your Mac, open System Preferences and click Security & Privacy.
Select Screen Recording (scroll the left column down). And then you can see a list of apps that are permitted to record the contents of the screen. If you want, you can prevent an app from recording your screen by deselecting it.
If you are not sure about an app, you may want to contact its developer.
Full solution found at: https://macreports.com/your-screen-is-being-observed-on-mac-fix/