That's not exactly what he said- he said that he never legally adopted her as his grandchildren, which is silly since it only matters if his son legally adopted his stepdaughter.
You're right and Buffet only said that he, himself, had not adopted her.
However, I don't believe that adoption by his son would automatically subject Buffet to a legal relationship to her as his granddaughter. I could be wrong and perhaps someone knowledgeable in this kind of legal matter will set things straight for us.