Kinda says it all

So what did Luther believe about the question of whether Muslims worship the True God?

Or, for that matter (to ask a question which seems to be an afterthought in this whole conversation the Missouri Synod is having right now), what did (does) Jesus think?

One of the most basic rules of hermaneutics is that if there is some question about the meaning of a text, and you want to understand the writer's intent, you look at what he has written elsewhere on the same subject. What he says in the same document about that subject is generally held to be especially helpful.

Seems to me to be a matter any honest inquiry into the meaning of that disputed passage in the Large Catechism would investigate rather early in the process- certainly before issuing accusations of false teaching against those with whose interpretation they disagree.