The KJV follows the Masoretic text which says, "children of Israel". Agreeing with the KJV are the NKJV, NIV and the NASB ("sons of Israel"). The term, "the number of the children of Israel (מספר בני ישראל)" does not refer to the 12 sons of Jacob. If the 12 sons of Jacob were meant, the term would be "the number of the tribes of the children of Israel" as seen in Joshua 4:5, 8. During Moses' time, "the number of the children of Israel" was the entire population of Israelites who had escaped Egypt. In Hosea 1:10, the same term, "the number of the children of Israel (מספר בני ישראל)" refers to the innumerable future population of the Israelites, not the 12 sons of Jacob. So any critic who argues against the Masoretic reading on the assumption that it refers to the number "12" is beginning with the wrong premise.
To paraphrase, the Masoretic reading says that God set the borders of the nations in the Middle East by keeping in mind the space required for the population of the Israelites ("the number of the children of Israel"). This interpretation is supported by Wesley's Notes:
The Masoretic reading makes perfect sense and does not need to be change. The ESV and NLT, however, follow "sons of God" as found in the Dead Sea Scrolls. The Septuagint has "ἀγγέλων θεοῦ" (angels of God). Critics who make this change most often assume that "the number of the children of Israel" refers to the number "12" and see that such a small number is not congruent with the number of nations in the Table of Nations (Genesis 10). These critics choose the reading of "sons of God" as it would support a higher number than 12, such as 70. These critics suppose that the original reading was "sons of God" and the Jews changed it to "sons of Israel" because of a religious bias. However, a case could be made for a religious or cultural bias on the part of Gentiles or heretical sects with the reading of "sons of God". Commentator Albert Barnes says:
As for the Dead Sea Scrolls, they were created by the Essenes. This sect held a curious devotion to angels. Josephus, describing what a convert to the sect had to observe, writes: "Moreover, he swears to communicate their doctrines to no one any otherwise than as he received them himself; that he will abstain from robbery, and will equally preserve the books belonging to their sect, and the means of the angels." (Wars of the Jews, Book 2, chapter 7). The phrase "sons of God" in the Dead Sea Scrolls is a term for angels (Job 1:6). It is not surprising that an Essene text prefers a reference to angels rather than to the children of Israel. The Essenes, being an isolated sect, did not care so much for the other Israelites.