Observation haki is like having your senses hightend
So if two people are fighting both with strong observation haki and person one hits person two person two will dodge the hit.
But because person one has strong haki person one will know where person 2 will dodge so person one will hit where person two will dodge
but because person 2 also has strong observation haki person 2 will know that person one is going to hit person 2 so on and so fourth what will happen???