The typesetter for the 1841 British edition misread the word thereof here in 3 Nephi 8:9 as therefore, which will actually work from a logical point of view: “and the city of Moroni did sink into the depths of the sea and the inhabitants therefore were drowned”. The secondary therefore was maintained in the 1849 LDS edition and in the first printing of the 1852 LDS edition. The correct thereof was restored in the second 1852 printing (most likely by reference to the 1840 edition).
Not counting biblical quotations in the Book of Mormon, therefore always comes at the beginning of a clause in the text (with over 600 instances), never within the clause (although sometimes there is a connective and or now before the clause-initial therefore). When the Sermon on the Mount is quoted in 3 Nephi 13, there are five instances where therefore appears later in the clause (just as it does in the King James Bible for Matthew 6):
There is one interesting case in the Book of Mormon’s version of the Sermon on the Mount where the therefore is at the beginning of the clause but in the King James text the therefore occurs later in the clause:
There is also a case where the Book of Mormon text has a therefore but the corresponding King James text lacks it (namely, in 3 Nephi 12:16). As might be expected, this instance of therefore begins the clause.
This usage shows that the secondary reading here in 3 Nephi 8:9 goes against the placement of therefore everywhere else in the Book of Mormon text proper. If therefore were the correct reading in this passage, it should come after the and, thus “and therefore the inhabitants were drowned”.
Summary: Maintain the occurrence of thereof in 3 Nephi 8:9: “and the inhabitants thereof were drowned”; thereof is not an error for therefore since in the Book of Mormon text proper therefore always comes at the beginning of the clause (perhaps after a connective and or now), never later in the clause.