This sounds like a switch matrix fault, with target 'O' bringing up a 'phantom switch', in this case one programmed to spot a 1 to 4 target. These things need three closed switches to create an imaginary rectangle with the phantom switch, where the faulty switch is opposite the phantom
When the problem occurs, take a 'snap shot' of all the switches closed at the time, including the storage trough, in-line targets, and the flipper buttons. I'm wondering about the way it repeatedly occurs as Spot 1-4 - is this while operating the flippers, or without, i.e. does it happen with the ball in play placed in the shooter lane, and no other activity? If not, the flipper button/lane change contacts may be part of the problem
With a copy of the switch matrix, try to plot out the situation where the problem occurs. Target O would only be one corner of the rectangle, but look at the other switches closed at the time. If a rectangle exists with Target O, two other switches and Spots 1-4, investigate the others, especially the one diagonally opposite Spots 1-4
Edit - the chart shows that Spots 1-4 and target O are on the same Row (#8) of the matrix, with Spots on Column 3 and O on Col. 4. If a short exists between the two columns, then O would also register as Spots while the short exists. The remainder of Col.4 are the targets R, B & S, and targets 1 through 4 themselves, though that would need one of them stuck closed as well as having a faulty diode