I am not a guru on linux, and actually is the first time i built LFS 6.4, but this is what i would check/do in your case:
- is the env executable?
- what happens when reinstalling Core-utils?
- maybe trying ldd on /bin/env shows something missing?
- try going some steps back and copy/paste the commands, maybe while installing you mistyped something...
- maybe you forgot to do the second pass of Core-utils?
hope any of those help you out.