Then the observer abides in its own nature.

When the mind becomes still (sutra 2), the true self (draṣṭṛ, the seer) reveals itself as it is. This is not about creating something new, but clearing away what obscures clear vision.

• Tadā — Then (when fluctuations cease)
• Draṣṭuḥ — Of the observer, the seer
• Svarūpe — In its own form/nature
• Avasthānam — Abides, remains established

This is the state of yoga: pure presence, consciousness knowing itself without the distortion of mental waves.