In what ways were Jews confused by the appearance of John the Baptist?

For the most part, they weren't. Jewish tradition is that the founders of Christianity had very little impact upon the Jewish community - which is why the early Christians soon had to seek adherents among the non-Jews. Most Jews at the time (and that means well over 90%) never heard of Jesus, Paul, John, et cetera.

Answer:

Within the Christian narrative, Jesus claims that John the Baptist was a reincarnation of Elijah the Prophet who needed to come in order to inaugurate the coming of the Messiah. However, John the Baptist himself refused to validate this view. Given that John the Baptist was well-received in Jewish circles, this served to confuse the Jews about Jesus' true nature as the Messiah.