General Discussion

"All parties have observers watching every step of the process"
Yes, all parties are allowed to observe. BUT,
No, not every step. Only the steps they can observe. They cannot observe the summation done inside the computer.
Here the problem can be in the computer's summation process where after 500 votes, 1% or 2% can get changed unseen by human eyes. This is a simple solution. The kind of solution that Trump alluded to. Either Russia, Musk, or Big Balls could possibly insert such code and would also know how to do it such that code check numbers would still match.

Also, the subsequent random checks can be very lucky by how the random choice is made. Properly, that would involve a random number generator picking random numbers. Then the unlucky team has to count through hundreds of ballots to find number 12,345. Humans like to pick at random. Much easier. The first batch gets the most picks and someone says: Let's call it a day. That's why the first 500 ballots don't get the changes made.

And what do they do if one error is found. Pick another ballot and call it a day. The science of statistical use is a very questionable science, especially when it doesn't get fully checked for repetition.

"Our system of elections is so decentralized, and has so many people involved, that only by magical handwashing all the problems away can such a scheme be pulled off."
It doesn't have to be magical if it is done smartly.