What's the difference between looking at a star from a black hole and looking at it from empty space? My guess is that the curvature of space-time distorts the wavelength of light thus changing the color observed by observer 1. Is the size of the observed object distorted? Adopted from Being optically fooled by gravity [closed]
In your diagram where the black hole is just behind the observer on the line between the observer and the object being observed the answer is "yes", the apparent size of the object will shrink. The color of the object will be blue-shifted and the whole universe will appear to contract.
There is a great demo of the effect at Journey into a Schwarzschild black hole (scroll down to the "Engulfed in blackness? NO!" section).