We know that $$ \nabla^2 \left( \frac{1}{r} \right) = -4 \pi \delta(r) \tag{1}$$ and that the general solution to the laplace equation $\nabla^2\Psi = 0$ may be expanded as $$\Psi=\sum_l \left(A_lr^l+B_lr^{-(l+1)}\right)P_l(\cos\theta) \tag{2}$$ where I've kept it simple by assuming azimuthal symmetry.
If we take the $l=0$ term and apply the laplacian operator, we get
$$\nabla^2\Psi_{l=0} = -4\pi B_0\delta(r) \, , \tag{3}$$
so the laplacian is only zero for $r \ne 0$. However, I thought the general solution $(2)$ of the Laplace equation was supposed to hold for all $r$ and $\theta$. Yet $r=0$ it is clearly not a solution. What gives?
Granted I can understand that a $\frac{1}{r}$ potential is equivalent to that of a point charge, in which the Laplace equation would no longer apply, but I thought the general solution would hold for all regions of interest in which we know there is no charge.