Catalyzes the conversion of indolin-2-one to 3-hydroxyindolin-2-one. indolin-2-one + O2 + reduced [NADPH--hemoprotein reductase] = 3-hydroxyindolin-2-one + H(+) + H2O + oxidized [NADPH--hemoprotein reductase] Secondary metabolite biosynthesis; 2,4-dihydroxy-1,4-benzoxazin-3-one biosynthesis; 2,4-dihydroxy-1,4-benzoxazin-3-one from indoleglycerol phosphate: step 3/5. Belongs to the cytochrome P450 family.