Surely, if there was a requirement to pass 1st time (any of the aptitude tests) then the facility to repeat the tests would be removed. On that count I'd say that EF2020 should be given every encouragement to reassess his/her options and, if still determined to become a Service pilot, should reapply - regardless of his knockback. One caveat that I would add is that only EF2020 (and the AIB) know if his/her failure at Observer aptitude is the only reason that they have been discouraged from reapplying. I am aware of a number of individuals that have passed all aptitude tests, to a good standard, but do not have what it takes to be competitive for a job as a Service pilot.
EF2020. If you don't reapply then you will never know.
Whatever happens, give it your best shot. If you don't, then you will never succeed in this environment.
kipper