Redstone does not light up

If you update the observer in the following configuration, the redstone does not light up.

Put a sticky-piston facing up on the ground and put a block on top of it. Next, place a observer facing into this block behind it.  If you now place redstone dust to the side of the sticky-piston and update the observer, the sticky-piston extends, but the redstone does not light up.  I had this bug in my construction and I was confused because I couldn't see how the piston could extend.