Observations merging is interesting question. Simplest thing to do may be to show enemy unit as it is seen by our unit closest to them (here we just use "real" distance in internal game's coordinates). In other words, Voronoi diagram is built with our units as seeds, and enemies are shown as seen from their cell center. This would evade enemy "phantoms" but enemies can suddenly "teleport" as they move closer to other friendly unit (or can't they? I don't really know).

In lore it may be explained like "our units know distances to objects and choose closest one among all units" since we already use "units can communicate instantly" magic.