I know this is an old post, but it is a very basic and useful question, none the less.
First of all, formal meditation practice is a temporary expedient. What is being practiced? Observing mind, whatever is there is observed without arousing the human mentality (any further). Since observation's activity is the human mentality already, it would hardly do to create minds on top of minds where there are none to begin with.
Why? To develop the habit of a permanent subtle concentration observing mind.
Just observe the mind anytime, at all times. It does not require a particular posture. It really does not matter at all outside of the will to observe the human mentality.
Of course, observing mind in stillness and during activities is just a device in itself. A very effective device.
Is witnessing mind okay to witness during meditation? Or is the object to simply be in awareness?
One just uses witnessing the mind without following its contents to rest the mind on itself in order to develop the basis for simply being in a state of independent awareness at all times. This is the benefit of observing the mind. This is so because the human mentality is unable to function independently by the force of habitual reliance on externals to prop itself up. This is so because the identity of the human mentality is falsely in control of the organism that is going to die, and it exists only by comparing itself to objects it considers not its original being.
Some people use formal meditation to relax, or to quiet the human mentality, but this is just a method of comfort, not the device of refining away the artificial identity of the human mentality to arrive at real human being, independent of objects of thought, completely awake.
Witnessing witnessing is a perversion of the practice of observing mind developed by the authentic teachings. Do not let this develop further. If this occurs, just take a break and start again later until fatigue set in.
As soon as one can observe mind in the midst of situations without following its stream unawares, one should hasten to do so. Silent sitting is suitable for rank beginners. Real practice develops in the midst of ordinary situations. Formal meditation practice is a temporary expedient.