If he was born out of wedlock, and had no acknowledged father, and was born in Hawaii, then he might be natural born. The problem is that he did have an acknowledged father, or so he claims. Generally, especially in cases where the mother did know the father was already married, the law treats the children as legitimate, even though the marriage was not valid. thus in this case, as the child of an alien.
If born outside the US, an out of wedlock child of a US Citizen mother is a citizen at birth, but since that is due to statute law, such a child, like the child of one alien and one citizen parent (born outside the US) is considered naturalized at birth, not natural born, or so the Supreme Court says in the latter case at least.
Obama Sr was not a US citizen. He was not domiciled in the US. The US immigration law does not govern whether Obama was a British citizen at birth if born in the US. It is the British law that is relevant.