Exclusive measurements of the analyzing power and two spin-transfer ob
servables for nucleon knockout from an O-16 target are presented, at k
inematic conditions chosen to emphasize interactions in the nuclear in
terior. The analyzing power data are substantially reduced in comparis
on with values calculated in the distorted wave impulse approximation
(DWIA) using the free nucleon-nucleon interaction, particularly for kn
ockout of the deeply bound 1s(1/2) nucleons. Inclusion of density depe
ndence for the interaction in the calculations improves the agreement
with the data, but does not provide a satisfactory description for nuc
leon knockout from O-16. Spin-orbit distortions are shown to strongly
affect the DWIA predictions of the 1s(1/2) analyzing powers over most
of the experimental kinematic range, but notably not near the points o
f negligible recoil momentum. Hence these data offer constraints on th
e optical potentials and independently on the two-body effective inter
action.