Let's take a step back and analyse what we know we know. Understand that there are some things that we don't know we know, but we can make a reasonably educated assumption. Accept that there are things we know we don't know, and can make some effort to find out. But there will always be things that we don't know we don't know.
With thanks to Donald Rumsfield, Bless him.
We know there was a dispute. Perhaps the Muslim community, or the relatives of the deceased complained. It's irrelevant.
What is relevant is that the cemetery promoted itself as mulit-denominational. Nothing wrong with that.
For millenia people have been deciding/prefering how when and why their mortal remains should be "disposed or retained". Muslims, Jews and perhaps other religions insist on being buried (and remaining undisturbed) amongst those of similar faith, or at least away from non-believers. Nocon has a similar desire/requirement.
Bhuddists/Chinese/South Asian seem to prefer to buy plots of land so that their family can be buried together, but in strict hierachical order. GrandParents at the top, parents below, siblings equally side by side, etc.
Some religions require cremation, others might desire to be buried at sea. Winston Churchill wanted to rest beside his dogs and his house, etc.
It really doesn't matter.
It might seem intolerant to those of us who don't give a hoot. (I might prefer to be buried in the Chinese tradition because of the regular annual respect paid to the deceased. (Qingming Festival)
But these requirements have been going for millenia, e.g. Stonehenge, burial mounds, viking funerals, etc.
It would be a long and difficult job to try to start denying people their burial rites. It's also perhaps a little disrespectful to accuse those, who have requirements, of intolerance.
Now to the operation of multi-denominational cemeteries. It doesn't mean that we're all bunged in together irrespective of faith. It means that the management are aware of individual requirements and can accomodate them.
For instance:
The cemetery in question did promote itself as multi-denominational.
When one approaches cemeteries, undertakers etc, religious requiements are discussed. If the cemetery or undertaker forgets to mention this, they are IMO, failing the family of the deceased.
Now we don't know what went on when the Muslim man was interred, we don't know what reassurances were given to the family at that time.
IMO, the management of the cemetery should have been aware of the method of operating a multi-denominational cemetery. If they were not, they were incompetent.
If they later overlooked the requirements of multi-denominational burials, they were incompetent.
Now if any of us experienced such incompetence as that we would be fully justified in complaining.
You can call it intolerance if you wish, but IMO that's just another case of exploiting sensitive issues to further your own agenda. That's racism at work.