You are quite right, both of you, and subtly wrong. Just read on.
It was not about God, it was not about religion. This business about the Mohiyals believing that they were mercenaries who fought for a losing Islamic prince is not about God. The story never implied that there was any religious fervour involved. Mohiyal Brahmins remain Brahmins of a high order - I forget their exact affiliation - and their offshoots the Bhumihar Brahmins are Sarayupareen of Kanyakubja - in simple language, those Brahmins from Kanauj who lived on the other side of the Sarayu River, the River that flows past Faizabad and Ayodhya, and on the banks of which myth and legend claims Lord Rama was born. These two root and branch were never holding themselves out to be followers of the One God, but as mercenaries, who incidentally existed among Ghurids and Afsarids as well.
A good example of this kind of knight errantry is from an historical example, Banda Bairagi, who took to arms on the urgings of a dying Guru Gobind Singh. Banda was Hindu, but fought for the Khalsa religion on being asked to fight on by the Guru. The difference is that he converted to Sikhism; the Mohiyals did not convert.
It isn't about history, either. The annals of some of the sects of northern India are full of stories about their lives and times throughout a wide swathe of territory including Afghanistan, Tajikistan, Uzbekistan, Iran and Iraq. Not at all unlikely, considering that it was a tradition which is traceable at least to 500 AD for eastern UP and Bihar youngsters to go out and seek 'naukri', which was then strictly military service. The model that Indian, south Asian warfare followed, and to some extent that nearby kingdoms and powers followed, was the war-band, under a contractor, who brought a given number of troops into service, in the case of cavalry, complete with horse and armour, and who claimed the total gross wages and redistributed these with a modest cut for himself.
But there is nothing historical to show that there was actually a Mohiyal contingent fighting at Karbala. That is not an established historical fact.
What I found annoying was the misplaced piety and excessive belligerence of good Muslims who felt that in some way, this quaint legend was impugning the purity of their faith. Stuff and nonsense! If they want to believe that they carried the Cross for the Lord, who is to gainsay them, and should Christians then jump up and down in anguish? Their belief that they owed a debt of loyalty to Hussain gives them a soft corner for Muslims, which is always a useful thing in volatile Indian society.
Their folk legend is their folk legend, and there is no need for supercilious comment about it.