I'm really surprised your husband has this problem. Virtually half the population of NYC and many other places is from PR or RD, and I honestly can't imagine why anybody would think he was a Muslim. Furthermore, I can't imagine him doing anything that would make people uncomfortable.
In July/August of 2001, I was in Spain, and I happened to have occasion to take the trains around Valencia a fair amount. On one occasion, I saw a very diverse group of people board the trains at various stations - one was a semi-military looking light-skinned ME looking man with close-cropped hair, dressed in good business casual (pressed khakis); 2 were ME looking guys who were not as well dressed, and 1 was a black man I assumed to be Senegalese, with a briefcase of the type normally used for selling counterfeit watches. They assembled on the train and struck me as an odd group, because they were so different from each other. Then I realized after a bit that they were speaking English, in their fashion (not very good, but they could understand each other). They were talking about papers, and I assumed that they were illegal immigrants trying to get legalized, so I picked up my (Spanish) paper and went back to ignoring them. Later, I discovered that Mohammed Atta had been in that same place, at that same time, and I have always been convinced that the reason none of the investigators have been able to find out where he met his co-conspirators in Spain is because he met them on the train. They assembled one by one or two, discussed their issue for about three stops, and then left one by one.
So there was reason for these passengers to be concerned. But I am very sorry they are concerned about your husband, and I cannot understand why they should be worried.
We aren't in NY, which probably explains it. We live in Georgia, and although it is getting more diverse, there are still many in this area that don't know Portugeuse from Arabic and still think anyone with dark skin is a foreigner. By far, a majority of Georgians would not be so ignorant, but it only takes a few, and he seems to run into more than most.
Your story made the hairs on my arm stand up. How creepy that you were possibly that close to such a monster. I always want to think that someone so evil would be obvious, and you would be able to tell right away. I know that it isn't this way in reality. That story will give me nightmares.