Here in Italy there is a big mess about traslation of this:
“A model with this rule, if it is within 3” of one of their army’s war machines, and not mounted on a monster, is allowed to take a “look out sir!” roll as if they were within a nunit of five or more models."
Erm, it says “as if they were within a unit of five or more models” not “within 3” of a unit of five or more models"
so you count as if you were in a unit of 5 or more models, so get a 2+ LOS
A normal character without the rule would get a 4+, but the demonsmiths special rule overrides the standard character rules, and makes you count as if you were in a unit, therfore getting a 2+
The description for the Infernal Enginneer is written twice, once on the 4th page of the Chaos Dwarf section (where it explains the Dark-Forged weapons) and then again right before the army list (Lords, Heroes, etc)
The description is not the same. In the first one then word “within” is used, whilst in the second description the word “in” is used.