"觀"自在菩薩, The first character of "觀" is generally understood as meaning Observing but "觀" could it also mean "觀世音菩薩" (Guan Yin). As because the subsequent words in the 心经 "Heart Sutra" describes how Guan Yin has spoken to Gautama Budha's deciple 舍利子.
So, I could interpret 觀自在菩薩 as when Gautama Buddha was about to attain Nirwana (Enlightenment) where his disciples (including 舍利子 who is Gautama Buddha's first disciple) are closely at his side observing their peaceful Master in deep meditation. And it is at that same time that Guan Yin (the previous Buddha) arrived at the same location to summon words of wisdom to Gautama Buddha's followers.
It was a significant moments when Gautama Buddha has attained Enlightenment, and Guanyin; the previous Buddha descended upon Gautama's disciples to, or perhaps to the worldly beings to remind of the true meaning of the ending of the life-death-rebirth cycle.
(the above are summarized and found via Web research and Article Readings, it is only for my reference in the Study of the Heart Sutra)
