Isn't this simply because the target nation would have needed Metallurgy to get to the Industrial, though?
As i recall it: No. Metallurgy or the Great Wall for the that matter donnot matter for this principle. It does of course work the other way around. Once the industrial age is reached Metallurgy is aquired und thus the effect of the Great Wall does no longer apply. The effect of the small walls does also not apply once city size is reached.