When he was asked to watch the hit, he was no longer a "spectator", he was involved in the match as a limited ref. No foul, but he faltered in performing his duty when he failed to vocalize the results of the hit that he was asked to watch. I'd be pissed if somebody tried to tell me otherwise.
As it states in the handbook/rulebook..
9-3 Calling Fouls
1. Referees will call fouls as soon as possible after they occur.
2. When called to a table, a referee will call all fouls that occur while the referee is at the
table.
3. When making a ruling, a referee will announce the ruling and, if calling a foul, a brief
description of the foul or rule that was violated. Some examples are:
“Good hit”
“Foul – double hit”;
“Foul – no cushion after contact”;
“Foul – contacted the 3-ball first” (if the 3-ball was an illegal object ball);
"Foul – object ball jumped off table".
When a scratch occurs or if the cue ball is jumped off the table, it is not necessary for the
referee to announce a foul or the basis for the foul.
4. In the matter of judgment calls as referred to in Rule 9-1, a referee is not responsible
for explaining to a player what methods were used to determine a ruling. At their
discretion, a referee may briefly describe the violation, but they are not responsible for
giving a player a detailed description of how the ruling was determined.
5. After calling a foul that results in ball in hand, the referee will pick up or retrieve the
cue ball and hand it to the incoming player.
6. A referee will not call a foul or penalize a player in a dispute over a shot that was
unseen by the referee if the call would have been a judgment call and the referee cannot
clearly determine that a foul occurred. However, if the unseen act involves a rules
application, then referees and event officials will make every reasonable effort to ensure
that the correct and appropriate ruling is made.