First off, when splash damage occurs, the damage occurs simultaneously, but that means the ACTIVE player determines damage order, not the defending player. It is not all truly simultaneous, only by the in game terms, and it is definitely not the defending player's decision.
Second, it says when it happens, so you most certainly wouldn't wait until the end of the action in the energy explosion or hypersonic speed examples. I would assume since this power triggers "simultaneously" with the figure being removed, it should be active player's choice, but the defeated character may get removed first and supersede Johnny since it is "immediately".

Im not sure how this could be interpreted in any different way. In the rulebook it states that when a character clicks onto ko that character is defeated. Period. Then you are to remove the character from the map. Defeated... aka "ko'ed" happens first. His ability clearly says "when a character is ko'ed" not "when a defeated character is removed from the board". You can't just magically rewind a step so that JB meets the pretequisite of having LOF to the character.

nope, that is not actually where the period is placed in the sentence on page 4.

There is no time in between the two parts of a character being defeated to check the WHEN trigger until you remove him immediately from the board.

This to me highly suggests that removing a character is part of KOing the character, and not something that happens after all the "WHEN KO" triggers resolve.

The confusion comes from some ambiguity from the special power and definitions.

Definitions from Rule Book:
Looking at the definitions, it starts to imply that Knocked Out is the KO's show and Defeated is when the character is removed. But the definition of KO'D makes all three definitions equivalent. So, KO'd would mean that a figure is removed from the board after KO's showing on their dial.

After looking farther at the definitions, I see the argument that the KO'd figure will not block line of sight.

Is there any way that we can get a definite ruling on this please?

Thank you.

Blaze must have LoF to his target before the friendly figure is KO'd. If the character is not in line of fire until the figure is actually KO'd it is not "an opposing character within Johnny Blaze's line of fire" when it is doing the KO'ing. It wouldn't becomes an opposing within LoF, the qualifier, until after the event triggering the "when" has occurred.