i believe this is one of the known unresolved issues with the v2 API test implementation of the observation page. there should be an option somewhere on the page to allow you to go back to the current (non-test) version of that page, and that should allow you to fave the observation.
(since this issue is already documented, this bug report should probably be closed.)
more info: https://forum.inaturalist.org/t/obs-detail-on-api-v2-feedback/21215