Running your test program in CVI 6.0, I didn't see a line with x1 == x2 or y1 == y2.
You could try the following.
 if (x1 == x2 || y1 == y2)
    PlotLine (panelHandle, PANEL_GRAPH,
              x1, y1, x2, y2, VAL_BLACK);
  else
    PlotRectangle (panelHandle, PANEL_GRAPH,
              x1, y1, x2, y2, VAL_BLACK, VAL_BLACK);
In your test file, I tried changing colors, changing the graph to Hot so I could pan and zoom, retaining the data, using SetPlotAttribute, but I never saw a line with x1 == X2 or y1 == y2.