Officially, you are better with a Lyre of Building than trying to find rules for undead laborer to build towns. The topic of wether mindless creatures can take simple orders or not is subject to GM fiat and normally will see table variation.
Now, if you happen to be interested on what Jason Nelson, the creator of the original kingdom building system for the Kingmaker AP, has designed for undead workers, you should take a look on the Ultimate Ruleship (3rd party book from Legendary Games). Which, among other things that improve the kingdom building system, brings some magical improvements like the Deathless Laborers, Animated Automation (animated objects as laborers), Hallow/Unhallow (to cast permanent spells on a building) and Permanent Teleportation Circle (exactly what the name says):
Deathless Laborers (2 BP per building or 10 BP per hex):
While incapable of skilled labor, mindless undead created
with animate dead are utterly tireless in performing simple,
repetitive tasks. Animated skeletons and zombies can be
created and tasked to perform such simple labor, increasing
economic productivity but making the general populace
nervous about the possibility of the undead breaking loose
and going on a rampage against the living. Effect Infamy +1.
Deathless laborers in a city must be assigned to a specific
building that provides a bonus to Productivity. They provide
the following additional settlement modifiers: Economy +1,
Productivity +1, Danger +1.
Alternatively, deathless laborers can
be assigned to a hex with a Farm, Mine, Quarry, or Sawmill;
undead in these hexes provide +1 additional BP of revenue
(or increase Consumption reduction of a Farm by 1), while
creating +1 Unrest and increasing Danger in that hex by 5.
Prerequisite Caster’s Tower or Temple; Tunnels or Graveyard.
As for your question: Yes, it does limit their work.
By how much: That's up to your GM.
Some GM's will say that mindless creatures cannot do anything related to math, or measure distance, or measure weight. Others will say that they can do anything as long as you explain it properly. While others will say that they can do anything as long as they are being supervised and directed, as long as someone with the proper Profession or Craft skill is directing them.
Crafting a simple item (like a spoon) is a DC 5 Craft check, while crafting something a little more complex (like an iron pot) is a DC 10 craft check. Considering that mindless creatures make Int-based checks with a +0 bonus, and that Craft can be used untrained, that means they could craft simple items with a take 10 on their skill check. If they have the proper tools (at least +2 bonus), they could even make simple weapons, like long bows and short swords, or leather armors and shields.