Like a plain cake that's observed? (7)
I believe the answer is:
noticed
'observed?' is the definition.
(noticing is a kind of observing)
'like a plain cake' is the wordplay.
I cannot really understand how this works, but
'cake' could be 'ice' (I have seen 'Top cake' mean 'ice' so perhaps 'cake' could also mean 'ice') and 'ice' is present in the answer.
This explanation may well be incorrect...
'that's' is the link.
Can you help me to learn more?
(Other definitions for noticed that I've seen before include "Realised" , "Perceived or observed" , "Spotted" , "Became aware of" , "Marked" .)