Textual: This is a repeat of the story found in Mosiah 8:6-11. Why is the story repeated? There is nothing in this story that returns us to the essential story line of Ammon, which is the meeting and eventual liberation of the Limhites. This is a sidetrip in the current narrative. In the previous story, it fit into the context of the events very well. Here it appears out of place.
The plausible answer lies in the shift in sources. In Mosiah 8 we have the story from Ammon's point of view. That story made sense because Ammon knew of King Mosiah's abilities with the Urim and Thummim. However, in this context we have the story from Limhi's records.
As Mormon is writing the story he is using different sources. His current source is Limhi's account, and Limhi also records the incident of the men who searched for Zarahemla. In Limhi's records the story is relevant because of the great contrast between the expedition to find Zarahemla with its disappointing conclusion that Zarahemla had been destroyed (see verse 26) and the joy at discovering that Zarahemla really was still there.
As a modern reader, this is a useless repetition. In the context of each of Mormon's two sources, however, the insertion of the event is quite appropriate. We are left now only with Mormon's decision to include it. While Mormon is synopsizing, we may suppose from this evidence that he intended to remain relatively faithful to his source documents. Because the event was included in this place in his source, he reproduces it. This also suggests that Mormon's editorial hand was not as heavy as it could have been. He appears to allow much of the original to surface in hisd abridgement.