The canal zone was not US territory.
When McCain was born, it certainly was.
As it happens, though, McCain wasn't born in the Canal Zone anyway. He was born in a hospital in Colon, Panama.
Doesn't change anything. He was born of two full-fledged American citizens -- thus is a "natural-born" American, himself.
Doesn't matter in McCain's situation.
Vattel's "Law of Nations" AND "Blackstone's Commentaries on the Laws of England" BOTH contain an exemption to the "born in the country" criteria for the children born outside the country to a parent serving in the "armies" of the nation. (with both still needing to be citizens in Vattel's version, just the father in Blackstones).
If we are going to use Vattel's criteria (and that where the two citizen parents & born in the country notion comes from)
§ 212. Citizens and natives.
The citizens are the members of the civil society; bound to this society by certain duties, and subject to its authority, they equally participate in its advantages. The natives, or natural-born citizens, are those born in the country, of parents who are citizens
We should also use his:
§ 217. Children born in the armies of the state.
For the same reasons also, children born out of the country, in the armies of the state, or in the house of its minister at a foreign court, are reputed born in the country; for a citizen who is absent with his family, on the service of the state, but still dependent on it, and subject to its jurisdiction, cannot be considered as having quitted its territory.
Both sections are in Law of Nations, Book I (the link is the 1883 printing of the 1852 edition, which was itself but an update of the 1833 edition, which was a fresh translation by Joesph Chitty. But the most of the founders, certainly Ben Franklin, who saw to it that the Convention had access to a copy of "Law of Nations", could read the original French anyway. Vattel was a noted Swiss jurist who was born in 1714 and died in 1767. "LeDroit des Gens" is certainly a work of the first magnitude. It modernized the whole theory and business of International Law, brought it out of the study into the field, the mart, the council chamber, and the palace. Vattel was from that part of Switzerland that spoke French, although French was also the language of diplomacy and culture in those days, which why "The First American", B. Franklin, spoke it. (The better to charm the ladies, especially the French ladies when he was sent to France to raise support for the American cause.)