Since no one has made a dedicated guide or discussion post to solving this I decided to make this guide to save everyone the time I had to spend finding a fix:

Download this community made (by Rose) patch that removes the resolution limit. The installation is super easy peasy.

Follow the installation instructions in the download page description:

https://community.pcgamingwiki.com/files/file/1960-observation-ultrawide-workaround/

also here's a patch to remove the black bars on your screen (also by Rose), since apparently the developers thought they were making a Christopher Nolan movie:

https://community.pcgamingwiki.com/files/file/1900-observation-black-bars-removal/