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I understand the possible use of 'seen' in the headline but in this context it would be taken by most readers as 'observed'. Sloppy sub-editing at best.

Not really... it's just a "form" of the subjunctive... "Maglev train _could be_/_would be_ seen making ..." You can leave the would/could be out from a stylistic point of view imho, but you normally don't do that out of context (as it is unfortunately done here)....

It would be one thing to hear a person say colloquially "I could see Barack Obama doing stand up comedy" but quite another for a headline to read "Barack Obama seen doing stand up comedy"

"Barack Obama seen doing lecture circuit" would be less unlikely around the end of his term.

But hey, if it's confusing to enough people I suppose it's a bad headline.

Common, yes, but not the most common, and not what I assumed. And apparently I'm not alone. I found it confusing.

How is it "obviously" not the perception sense unless you already know the relevant facts? A headline that's only informative if you've already read the article is pointless.