According to our current understanding of black holes based on general relativity, if an observer cannot directly observe an object falling into a black hole due to extreme time dilation near the event horizon, it would indeed appear as if the black hole has expanded after absorbing mass. This phenomenon is known as black hole growth or accretion.
When a black hole absorbs mass or energy from its surroundings, it increases in mass, which corresponds to an increase in its gravitational influence. However, due to the strong gravitational field of the black hole, time near the event horizon is significantly dilated compared to distant observers. This time dilation causes the infalling matter to appear to slow down and "freeze" near the event horizon from the perspective of distant observers.
As a result, an observer who cannot directly observe the infalling matter will see the black hole's size, as measured from their reference frame, increase gradually as more matter is absorbed. From their perspective, it would seem as if the black hole is expanding to accommodate the additional mass.
It's important to note that these conclusions are based on the predictions of general relativity, and our understanding of black holes is still an active area of research. The behavior of matter near the event horizon and the precise details of black hole growth are complex and involve the interplay of quantum mechanics and gravity. Future advancements in theoretical and observational studies may provide further insights into these phenomena.