The issue is threefold:

1. The SAG quote claims there is no special game meaning for the term line of sight. There is, so that's incorrect. 

2. If there is a distinction between the rule and the plain English reading of the phrase, then the text doesn't distinguish clearly enough which it is using. 

3. At least some of the definitions of "line of sight" don't actually reference being able to see the target. In short, if you check those definitions, you'd still conclude that being invisible is irrelevant to the application of the rules. Here's Websters, which I gather most Americans would probably turn to, and note that it refers only to lines between two points, not that you can see one from the other:

line of sight
noun phrase
1: a line from an observer's eye to a distant point
2: the line between two points
specifically : the straight path between a transmitting antenna (as for radio or television signals) and a receiving antenna when unobstructed by the horizon

Why is that answer in the SAC not answering the question?

"If you can’t see something, it’s not within your line of sight" <- That's the ruling to consider.

EDIT: for clarity.

Feel free to quote where someone said that it didn't answer the question, then we can actually discuss the claim.

Quote from Linklite >>

Feel free to quote where someone said that it didn't answer the question, then we can actually discuss the claim.

 Question. Doubt. A post questioning the SAC:

Quote from Anarion66 >>

 [...] So, a line of sight can exist even if you can't see along it, for example you have the Blinded condition (i.e., you have actually been blinded by some attack or effect).

Both the SAC entry and possibly the PHB Glossary entry for Frightened should be corrected.

 
 What I'm saying is that the SAC resolves that line in blue: "If you can’t see something, it’s not within your line of sight" 

Line of Sight has a special meaning in the rules in DMG. Either the person that wrote this SAC didn't know this.

Or infer that line of sight and Line of Sight is different.

Quote from Plaguescarred >>

Line of Sight has a special meaning in the rules in DMG. Either the person that wrote this SAC didn't know this.
Or infer that line of sight and Line of Sight is different.

The DMG is only talking about LoS "between two spaces," specifically squares (or hexes) when using minis on a tactical map. They use the term differently in different contexts. It's not a special meaning.

Quote from kenclary >>

Quote from Plaguescarred >>

Line of Sight has a special meaning in the rules in DMG. Either the person that wrote this SAC didn't know this.
Or infer that line of sight and Line of Sight is different.

The DMG is only talking about LoS "between two spaces," specifically squares (or hexes) when using minis on a tactical map. They use the term differently in different contexts. It's not a special meaning.

 Yeah if i can put it in context, Line of Sight gives a tip to determine whether there is line of sight between two spaces in the context of Miniatures, which isn't otherwise explained in the Player's Handbook. 

So if for exemple you have the Blinded condition but otherwise can trace a line between your space and another, Based on;

PHB: You can’t see and automatically fail any ability check that requires sight.

SAC: If you can’t see something, it’s not within your line of sight.

DMG: Determine line of sight between two spaces regardless wether you can see or not.

Running Combat

This section builds on the combat rules in the Player's Handbook and offers tips for keeping the game running smoothly when a fight breaks out.

Miniatures

Often, players can rely on your descriptions to imagine where their characters are in relation to their surroundings and their enemies. Certain combat encounters, however, can benefit from having visual aids or physical props, the most common of which are miniatures and a battle grid. Miniatures are typically used in conjunction with model terrain, modular dungeon tiles, or maps drawn on large vinyl mats. Most virtual tabletops for online play simulate miniatures and grids in a digital environment.

The following sections expand on the rules in the Player's Handbook for depicting combat using miniature figures on a grid.

Line of Sight

To determine whether there is line of sight between two spaces, pick a corner of one space and trace an imaginary line from that corner to any part of another space. If you can trace a line that doesn't pass through or touch an object or effect that blocks vision—such as a stone wall, a thick curtain, or a dense cloud of fog—then there is line of sight.

I think it would have been simpler if the Frightened condition instead said;

Ability Checks and Attacks Affected. You have Disadvantage on ability checks and attack rolls while you can see the source of fear.

Quote from Tarod_ >>

Quote from Linklite >>

Feel free to quote where someone said that it didn't answer the question, then we can actually discuss the claim.

 Question. Doubt. A post questioning the SAC:

Quote from Anarion66 >>

 [...] So, a line of sight can exist even if you can't see along it, for example you have the Blinded condition (i.e., you have actually been blinded by some attack or effect).

Both the SAC entry and possibly the PHB Glossary entry for Frightened should be corrected.

 
 What I'm saying is that the SAC resolves that line in blue: "If you can’t see something, it’s not within your line of sight" 

 The line in blue being resolved or not is not the concern. The concern being raised so that the SAC is giving incorrect information. The reasoning offered doesn't actually give the conclusion reached.

The Blinded condition could be an effect that blocks vision:

 If you can trace a line that doesn't pass through or touch an object or effect that blocks vision—such as a stone wall, a thick curtain, or a dense cloud of fog—then there is line of sight.

Fair, even though i'm not sure how a line could pass through or touch the Blinded condition. Seems more meant for external things to me.

Quote from Plaguescarred >>

I think it would have been simpler if the Frightened condition instead said;

Ability Checks and Attacks Affected. You have Disadvantage on ability checks and attack rolls while you can see the source of fear.

 Simpler and better!

Quote from Plaguescarred >>

Fair, even though i'm not sure how a line could pass through or touch the Blinded condition. Seems more meant for external things to me.

 It is :) I was just thinking of it as a way to bring positions closer together.

Line of sight, as conventionally used, means a theoretical entity with vision could see along the path, it doesn't require either end of the line of sight actually be capable of vision, so either (a) LoS is meant to be a term of art within 5e and does not have its conventional meaning, (b) being blinded does not necessarily prevent being frightened, or (c) SAC is wrong.

My suspicion is that RAI is just that you get the penalty while you can see the source of your fear.