Когда ночь тихая, мы любим наблюдать за звёздами на балконе.

It can be understood as either, depending on context.

In this sentence, because the main verb is a general-habitual мы любим (we like / we love), когда often has the sense of whenever or when(ever):

• Когда ночь тихая, мы любим... = When/Whenever the night is quiet, we like...

So this is not necessarily about one specific night. It sounds like a repeated situation or general preference.

Because it agrees with ночь.

Ночь is:

• feminine
• singular
• nominative

So the adjective must match it:

• тихий — masculine
• тихая — feminine
• тихое — neuter
• тихие — plural

So ночь тихая means the night is quiet, with the adjective matching the noun grammatically.

In Russian, the verb to be in the present tense is usually omitted.

So:

• Ночь тихая literally looks like night quiet
• but it means The night is quiet

This is completely normal Russian.

You would only see an expressed form of to be in other tenses, for example:

• Ночь была тихая — The night was quiet
• Ночь будет тихая — The night will be quiet

Because тихая is an adjective describing the noun ночь.

• ночь тихая = the night is quiet

But тихо is an adverb or a predicative word meaning quietly / it is quiet. It does not directly agree with ночь.

Compare:

• Ночь тихая — The night is quiet
• Ночью тихо — It is quiet at night
• Когда тихо, мы любим... — When it is quiet, we like...

So тихая focuses on the night as a quiet kind of night, while тихо describes the general atmosphere.

Because Когда ночь тихая is a subordinate clause, and Russian normally separates subordinate clauses with commas.

Structure:

• Когда ночь тихая, — subordinate clause
• мы любим наблюдать за звёздами на балконе. — main clause

This is the standard rule with когда, just like in English you often write:

• When the night is quiet, we like...

Because in Russian, любить + infinitive is a standard way to say that someone likes/loves doing something.

So:

• мы любим наблюдать = we like/love to watch/observe

This works much like English like to watch or love watching.

A few similar examples:

• Я люблю читать. — I like to read.
• Мы любим гулять. — We like to walk.

Here любим expresses a general preference, and наблюдать names the action.

Both can relate to watching, but they are not exactly the same.

• смотреть на = to look at
• наблюдать за = to observe / watch

Наблюдать often suggests:

• sustained attention
• watching something for a while
• observing something as it changes or moves

So наблюдать за звёздами sounds a bit more deliberate, like watching the stars or observing the stars, not just glancing at them.

For comparison:

• смотреть на звёзды — look at the stars
• наблюдать за звёздами — watch/observe the stars

Both are possible, but наблюдать gives a more attentive, almost poetic or thoughtful feeling.

Because the verb наблюдать normally takes the pattern наблюдать за + instrumental.

So:

• наблюдать за кем? чем? — to observe/watch whom? what?

Examples:

• наблюдать за детьми — watch the children
• наблюдать за птицами — observe birds
• наблюдать за звёздами — watch the stars

This is just the government pattern of the verb, and it has to be learned as a unit:

• наблюдать за

Even though за can also mean behind in other contexts, here it is simply part of the verb pattern.

Because after наблюдать за, the noun goes in the instrumental case.

The base form is:

• звёзды — nominative plural

But after за with наблюдать, it becomes instrumental plural:

• за звёздами

A quick case comparison:

• звёзды — nominative plural
• звёзд — genitive plural
• звёздам — dative plural
• звёзды — accusative plural
• звёздами — instrumental plural
• о звёздах — prepositional plural

So the ending -ами here is the normal instrumental plural ending.

Because in Russian, a balcony is normally something you are on, not in.

So Russian says:

• на балконе — on the balcony

This is the standard expression.

Compare:

• в комнате — in the room
• на балконе — on the balcony
• на террасе — on the terrace

So в балконе would sound unnatural in normal usage.

It describes where we are while watching.

So the intended structure is:

• мы любим наблюдать за звёздами на балконе
• we like to watch the stars on the balcony

In other words, on the balcony goes with the whole activity, not with stars.

Russian often leaves this kind of attachment to context, and here real-world meaning makes it clear: the stars are not on the balcony; we are.

Yes, it is understandable and natural enough, especially in a slightly literary or poetic style.

That said, many speakers might also say things like:

• Когда ночью тихо, мы любим наблюдать за звёздами на балконе.
• В тихие ночи мы любим наблюдать за звёздами на балконе.

These alternatives are a bit more conversational or idiomatic in some contexts.

So:

• Когда ночь тихая — fine, a little descriptive/poetic
• Когда ночью тихо — very natural everyday phrasing
• В тихие ночи — also natural, more compact

Yes, often it could.

Russian frequently drops subject pronouns when the verb ending already shows the person and number.

So both are possible:

• Когда ночь тихая, мы любим наблюдать...
• Когда ночь тихая, любим наблюдать...

The version with мы is clearer and more explicit. It may also add a slight sense of contrast or emphasis, even if only mild.

For learners, keeping мы is often helpful, and the full sentence sounds perfectly normal.