Yes; that's bad advice. It looks like in your picture the failure is where the keel stub meets the hull (concave section on the exterior). This section distributes the keel loads out to the hull and it is important that the glass fibers are continuous through that section or you could have a failure (the crack could open or the keel and keel stub could fall away).
You need a second opinion on it; and I think you might want to look into a claim against the surveyor for not finding such an obvious problem before purchase (accredited surveyors have insurance for these situations via their Association IIRC)..
To clarify, the buyer didn't hire the surveyor until he had purchased the boat (for insurance purchases, of course). Still, I was surprised that the surveyor apparently mentioned the damage in his report, but blew it off and didn't encourage further investigation. Especially given the fact the survey was done dockside! I'm probably naive, but I would have thought the insurance company would have caught it. I guess everybody's just going through the motions
Shouldn't surprise me, seems to be the new way to do business!