Fix 'observed' kwarg not doing anything on SeriesGroupBy
State: closed

- [x] closes #24880 
- [x] tests added / passed
- [x] passes `git diff upstream/master -u -- "*.py" | flake8 --diff`
- [ ] whatsnew entry


Labels:
name: Groupby

Comments:
Hello @krsnik93! Thanks for updating this PR. We checked the lines you've touched for [PEP 8](https://www.python.org/dev/peps/pep-0008) issues, and found:







There are currently no PEP 8 issues detected in this Pull Request. Cheers! :beers: 

##### Comment last updated at 2019-05-19 21:28:27 UTC
# [Codecov](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=h1) Report
> Merging [#26461](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=desc) into [master](https://codecov.io/gh/pandas-dev/pandas/commit/b99e84fb1d3bfa3506bf067bcdd0628ec7ace40c?src=pr&el=desc) will **decrease** coverage by `50.05%`.
> The diff coverage is `12.9%`.

[![Impacted file tree graph](https://codecov.io/gh/pandas-dev/pandas/pull/26461/graphs/tree.svg?width=650&token=eZ4WkYLtcO&height=150&src=pr)](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=tree)

```diff
@@             Coverage Diff             @@
##           master   #26461       +/-   ##
===========================================
- Coverage   91.74%   41.69%   -50.06%     
===========================================
  Files         174      174               
  Lines       50748    50751        +3     
===========================================
- Hits        46560    21161    -25399     
- Misses       4188    29590    +25402
```

| Flag | Coverage Δ | |
|---|---|---|
| #multiple | `?` | |
| #single | `41.69% <12.9%> (-0.09%)` | :arrow_down: |

| [Impacted Files](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=tree) | Coverage Δ | |
|---|---|---|
| [pandas/core/groupby/generic.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2NvcmUvZ3JvdXBieS9nZW5lcmljLnB5) | `13% <12.5%> (-75.96%)` | :arrow_down: |
| [pandas/core/groupby/groupby.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2NvcmUvZ3JvdXBieS9ncm91cGJ5LnB5) | `23.94% <13.04%> (-73.3%)` | :arrow_down: |
| [pandas/io/formats/latex.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2lvL2Zvcm1hdHMvbGF0ZXgucHk=) | `0% <0%> (-100%)` | :arrow_down: |
| [pandas/io/sas/sas\_constants.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2lvL3Nhcy9zYXNfY29uc3RhbnRzLnB5) | `0% <0%> (-100%)` | :arrow_down: |
| [pandas/core/groupby/categorical.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2NvcmUvZ3JvdXBieS9jYXRlZ29yaWNhbC5weQ==) | `0% <0%> (-100%)` | :arrow_down: |
| [pandas/tseries/plotting.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL3RzZXJpZXMvcGxvdHRpbmcucHk=) | `0% <0%> (-100%)` | :arrow_down: |
| [pandas/tseries/converter.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL3RzZXJpZXMvY29udmVydGVyLnB5) | `0% <0%> (-100%)` | :arrow_down: |
| [pandas/io/formats/html.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2lvL2Zvcm1hdHMvaHRtbC5weQ==) | `0% <0%> (-99.37%)` | :arrow_down: |
| [pandas/io/sas/sas7bdat.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2lvL3Nhcy9zYXM3YmRhdC5weQ==) | `0% <0%> (-91.16%)` | :arrow_down: |
| [pandas/io/sas/sas\_xport.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2lvL3Nhcy9zYXNfeHBvcnQucHk=) | `0% <0%> (-90.1%)` | :arrow_down: |
| ... and [131 more](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree-more) | |

------

[Continue to review full report at Codecov](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=continue).
> **Legend** - [Click here to learn more](https://docs.codecov.io/docs/codecov-delta)
> `Δ = absolute <relative> (impact)`, `ø = not affected`, `? = missing data`
> Powered by [Codecov](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=footer). Last update [b99e84f...2575c41](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=lastupdated). Read the [comment docs](https://docs.codecov.io/docs/pull-request-comments).

# [Codecov](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=h1) Report
> Merging [#26461](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=desc) into [master](https://codecov.io/gh/pandas-dev/pandas/commit/b99e84fb1d3bfa3506bf067bcdd0628ec7ace40c?src=pr&el=desc) will **decrease** coverage by `<.01%`.
> The diff coverage is `96.77%`.

[![Impacted file tree graph](https://codecov.io/gh/pandas-dev/pandas/pull/26461/graphs/tree.svg?width=650&token=eZ4WkYLtcO&height=150&src=pr)](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=tree)

```diff
@@            Coverage Diff             @@
##           master   #26461      +/-   ##
==========================================
- Coverage   91.74%   91.74%   -0.01%     
==========================================
  Files         174      174              
  Lines       50748    50751       +3     
==========================================
  Hits        46560    46560              
- Misses       4188     4191       +3
```

| Flag | Coverage Δ | |
|---|---|---|
| #multiple | `90.25% <96.77%> (ø)` | :arrow_up: |
| #single | `41.71% <12.9%> (-0.07%)` | :arrow_down: |

| [Impacted Files](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=tree) | Coverage Δ | |
|---|---|---|
| [pandas/core/groupby/generic.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2NvcmUvZ3JvdXBieS9nZW5lcmljLnB5) | `88.81% <100%> (-0.16%)` | :arrow_down: |
| [pandas/core/groupby/groupby.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2NvcmUvZ3JvdXBieS9ncm91cGJ5LnB5) | `97.18% <95.65%> (-0.06%)` | :arrow_down: |
| [pandas/io/gbq.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2lvL2dicS5weQ==) | `78.94% <0%> (-10.53%)` | :arrow_down: |
| [pandas/core/frame.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL2NvcmUvZnJhbWUucHk=) | `97.02% <0%> (-0.12%)` | :arrow_down: |
| [pandas/util/testing.py](https://codecov.io/gh/pandas-dev/pandas/pull/26461/diff?src=pr&el=tree#diff-cGFuZGFzL3V0aWwvdGVzdGluZy5weQ==) | `90.7% <0%> (+0.1%)` | :arrow_up: |

------

[Continue to review full report at Codecov](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=continue).
> **Legend** - [Click here to learn more](https://docs.codecov.io/docs/codecov-delta)
> `Δ = absolute <relative> (impact)`, `ø = not affected`, `? = missing data`
> Powered by [Codecov](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=footer). Last update [b99e84f...2575c41](https://codecov.io/gh/pandas-dev/pandas/pull/26461?src=pr&el=lastupdated). Read the [comment docs](https://docs.codecov.io/docs/pull-request-comments).

@krsnik93 this PR might be ok