Starting with Minecraft 1.16 Observers get powered when they are placed by SetBlock/Fill or similar commands.
In my understanding of FillUpdate it should deactivate this behavior.
Yet it does not do that and observers still fire when being placed by command, despite fillUpdate being set to false.

This video showcases the issue:
https://streamable.com/z6b215

This is the same issue reproduced with a vanilla client and a vanilla server.
https://streamable.com/55ixo8
I do not concern myself with the Mojang bug tracker since it would involve concerning myself with the moderators - people whose only task it is to reject vital bug reports based on formalities.
Version is 1.16.1 could test with 1.16.2 if necessary.

Are you able to reproduce this without Carpet mod? If so, has this already been reported to the Mojang bug tracker?

I think its fixed, @nnnik. Correct?

reopen if needed.

Have to check

The fix povided seems to cover all cases I could account for.