Ostwald Law of dilution makes no sense
You made $K_b$ = 0. That is where you were wrong. Taking approximation of Neglecting $\alpha$ with respect to 1 only gives us advantage of not solving the quadratic equation.

From there you can write $\alpha = √(K_b/C)$ here you can see $\alpha$ comes inversely proportional to $√C_o$ or we can say directly proportional to $√V$. From here you can deduce if $V$ approaches infinity $\alpha$ approaches 1. And that's the law.