The Indexer was completed succesfully only after disabling the 2 following finder plugins:
1. Smart Search - JFilters Indexer
2. Smart Search - SP Page Builder
One of these 2 plugins is problematic (probably JFilters), so I would suggest that you leave them unpublished unless you really need to index that type of content.
I have made some changes to the configuration (in the search form) as well as in the menu Browse by Topic and now it should be able to search within the active category + subcategories without actually having to select the filters.
For this to work, though, you must navigate to the Observations page via the Browse by Topic menu in the sidebar.