What were all these readers expecting, huh? It's a xenophobic country that nobody but a reptile or ambibian humanoid can enter without a local monitor, and when they are allowed to, they are told they can't just wander anywhere they want. Those citizens that deal regularly with outsiders are treated as being suspicious by the majority who don't. A half-blood, like Lulusha, is extremely suspicious in their eyes and quick to be blamed for all sorts of things.
So, of course a party of outsiders, humans, beastman, and hobbit, would be treated poorly. It's not even anything personal like it was in the earlier places where they wanted to kill Reiji due to his looks that reminded folks of the calaminity joe from centuries ago.
So, uhhuh. This was to be expected, 100%.