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isn't folding any hand to a random hand (and that's what the BB has as far as we are concerned from the SB) a mathematical error since the SB is getting 3:1 odds on his call ???

i mean the worst hand 27o is only a 65:35 dog to a random hand like Q6o. 27o is only a 67:33 dog vs AKo !!!

isn't folding the SB to the BB heads up a violation of the fundemental theorm ???

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Taken out of context, yes. But you are ignoring the overall unique context that the individual hands of an SNG take place within. If this were a cash game, folding would be an obvious error.