For sure, and again, I'm absolutely not trying to deny the existence of prejudice against Muslims or Arabs. As I said - and this is very much my own American experience speaking here as well - I do have a level of discomfort with the government deciding where those lines of acceptable conduct are with issues that are as messy and controversial as religion, even if I strongly abhor the conduct in question. But then again, I can also understand the desire to protect vulnerable groups, and I won't pretend that "just grow a thicker skin lol" is a particularly useful policy prescription.
I suppose the closest analogue we've had over here are the "God hates fags" people from the Westboro Baptist Church from a decade and change ago. While that's activity that is very blatantly intended to grossly disrespect, offend and provoke people, I don't think it's an unjust expectation for society to place on us to maintain a level of civility and peace, even in the face of such explicit incitement. The correct thing to do in a civil society in such situations is to move on with one's life and ignore it (unless the activity escalates to actual violence or direct consistent harassment), and I'd simply apply the exact same standards in this situation. Just as I should be able to maintain self-control in the face of someone telling me I'm an evil perverted faggot who deserves to burn in hell for eternity, a Muslim should equally be able to remain peaceful in the face of some pieces of paper being burnt (even if, again, both actions are pretty vile).
As I said though, I acknowledge that there's a lot of nuance here and that different societies may have different standards and principles with things like this. At the very least, the intention is obviously to protect vulnerable and marginalized people, and I'll always support that in principle, even if the details get messy.