Five-time world champion O'Sullivan, 39, has not played a competitive match since the World Championship in April.
World number four Murphy told BBC Sport: "It's a shame for the event and fans who bought tickets way in advance.
"Ronnie is an absolute genius on the table. But we know trying to predict his decisions is a waste of time."
O'Sullivan has not retired and says he still wants a place in the sport when he works out what that is.
Murphy, one of only 10 men to to have won snooker's 'Big Three' of World Championship, UK Championship and Masters, added: "It's a bit weird for a defending champion not to want to defend their title.
'He could win everything left-handed'
Shaun Murphy and Ronnie O'Sullivan look at the table during their World Championship meeting in 2014
Murphy says O'Sullivan is the most naturally gifted player snooker has ever seen
"But as with all geniuses, they walk a very thin line.
"It is very hard to understand some of the decisions he makes. But I am sure he has his reasons, and his reasons are private and personal to him - and who is to say he is wrong?
"He could come back after the new year, play in all the events and win all of them left-handed. Let's hope he makes a return as soon as possible."
But 33-year-old Murphy, who faces local amateur Ashley Hugill in his first-round match on Wednesday, said it was "insulting to the rest of the tour" to say O'Sullivan's absence would have a big impact on the event in York.
"One man doesn't make a game. Snooker is much bigger than Ronnie O'Sullivan," Murphy said. "Certainly when he is in the events it adds a certain sparkle to the tournament because he is the most naturally gifted player we have ever seen.
"It's a bit like when golf doesn't have one of the big names in it. Tiger Woods missed out on a few events a few years ago and they said golf doesn't have the same razzamatazz.
"But golf seems to have gone on and done OK and I think snooker will too."
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