Looking at reality as being composed of distinctions means having to accept that it is created by observers. One may find it plausible or not that a distinction exists while not being observed, but for the argument, this is without consequence. After all, whenever it is being noticed, this is by observation, and by observation only. The inverse can be postulated as well: Any observation necessarily notices distinctions. In the simplest case, any observation states that there is something that is distinct from everything it is not, for otherwise, this entity could not be said to exist. This “being said to exist” can be described as isomorphic to Heidegger’s “Dasein” (e.g. in his “Sein und Zeit”), i.e. an entity being brought into the world by the claim that it exists, against the backdrop of the possibility of its existence.
Without distinctions, nothing in the world could be distinguished from anything else, and in the end, not even the world itself could be described within itself as a concept, thereby becoming inexpressible. There would not be a word “world”, because as a word, it can only exist in relation to the system of words that is language, which in turn can only exist within communication. Thus, even the syntactic existence of “world” as a word rests on the premise of distinctions, before even considering the semantic value of the notion it references.
Any distinction is, then, necessarily an observation, just as any observation must be at least one distinction. In communication, distinctions are never expressed individually, but rather come in more complex arrangements, some of which we will analyze later. This is because such an observation cannot be expressed without its social embedding, e.g. its form as a message, for example being spoken instead of written, and by whom in which situation, and so on.
A reality composed of distinctions then has to be also a reality entirely created by observations. However, as reality itself is distinct from everything it is not, it can ultimately also only be existent when observed. Reality is what it is only from the perspective of this ultimate observer, because it is there that the distinction is drawn between those distinctions which belong to reality and those that do not. Any distinctions not taken into account by this observer are therefore left out of the concept of reality as seen from this particular ultimate observer’s point of view. “Ultimate” may sound like a claim of absoluteness, but the contrary is intended: Any observation of reality is an “ultimate” observation in that at the moment of its coming into being, it contains everything this observer is subsuming on the inside of the distinction of reality from everything it is not. However, the observation is “ultimate” in that it is itself positioned outside of communication. It can be referenced in communication, but it is impossible to express all of the distinctions included on the inside of the distinction in communication, because this expression itself would have to be included as well. If we accept this necessity and state that “reality is all this, and the expression that reality is all this”, we are missing this very statement on the inside of our distinction. We would have to state that “reality is all this, and the expression that reality is all this, plus the expression we just made that reality is all this, and the expression that reality is all this”. At this point, we would be missing the latest statement, have to include it, miss the next latest statement, and so on. Therefore, we can assert that, if the “ultimate” observation of reality is indeed possible, it can at least not be expressed in communication. Therefore, it is again without consequence in the argument whether such an “ultimate” observation exists or not. We may as well neglect it for its social nonexistence, and accept that any social concept of reality is inevitably incomplete.