In a control system, your control algorithm utilizes some states of the system to generate the control input which satisfies your desired output. If you can not measure all the states in the system , you need an ”Observer” (or more precisely a state observer) to estimate the unmeasured states from the outputs. Kalman filter is one class of observer.
An Observer based control structure could be useful in the case of Anti-windup Bump-less transfer, e.g. switching between manual (open loop) and automatic (closed loop) control mode. A more complex control system often use several control modes, e.g. failsafe or limp home mode. The control strategies and variables may vary, while the observer is the same.
How to design an observer in practice? One approach is the High Gain observer.
The High Gain observer is a fast nonlinear (or linear) full order observer with high observer gain chosen via pole placement. To protect the system from the destabilizing effect of peaking (huge estimation error during the short period, right after the initial time or the time when the output is changed abruptly), High Gain observers, as well as any continuous differentiating schemes, have to be followed by saturation of the control output.
See this article for an insightful analysis of the topic.