According to Osho, he refers to the master in the third person because 'master' is only a functional role, not his true identity. His reality is pure witnessing consciousness. Speaking as 'he' keeps a clear distance from the role, signaling non-identification and reminding seekers that he, too, observes the master, just as they do—from another side.
He says ‘he’ to show the master is just a job he watches, not who he really is.