Maybe it was just a typo and they forgot about the difference between "in one's zone" and "range 0-0" since those are almost always the same thing...
Typos are always a possibility, but we can't assume that something is a mistake. Otherwise, the entire rulebook comes under question. We must proceed that it is written as intended. Thus, until we find an official statement that says otherwise, the Goblin Builder is not able to repair walls.
This is contrary to how I have been playing him, and how I feel he is intended to play, but it is the way the rules currently read. I would love for someone to locate an official word saying that he can, but I have not been able to do so.
I wonder if Line of Sight should be renamed Line of Legal Targeting
That change may be more accurate, but I do not see it being adopted (and I personally am against it). The main reason being consistency. The phrase "Line of Sight" is used in a multitude of games and activities and has been for several decades. It has become a common vernacular.