What Indonesia allows has NOTHING to do with young Barry's US citizenship. Either he had it, or he didn't.
If he was a US citizen before SAD met Lolo, then he was a US citizen after he was adopted by Lolo.
Whether that is true or not, an Adoption under Indonesian law might cause potential legal problems back in Hawaii, thereby necessitating legal action to straighten the mess out. I've read speculation that it was quite coincidental that Stanley Ann Dunham was in Hawaii from Indonesia at the exact same time as Barack Obama Sr. Flew into Hawaii from Kenya in 1970, the Year his Grandparents acquired custody of him. It might be that they were both there to sign over custody to the Grandparents, because subsequent to this visits, he lived with his Grandparents from then on. An Adoption by them would not have been difficult at all under these circumstances.
Are you forgetting SAD’s plea in he divorce from Lolo, regarding a child (18 years old) whom she claimed to the court Lolo was still legally responsible to aid in college funding? Would only Lolo’s adoption of little barry make him legally responsible, or if the grandparents had adoption of little barry, could SAD make such a legal claim against Lolo?