Bob,
Here's direct discussion of the muffler issue from the minutes of the 5/21/63 weekly staff meeting of Studebaker department heads:
"Item #5. Quiet Exhaust System – Avanti
A letter was received from AMA concerning setting up a panel discussion on the Avanti and one of the models in the Chrysler line which the States of New Jersey and California are also refusing because of the noisy muffler. Mr. Minkel stated that the quiet muffler is installed – and the customer is charged for it – on all the California and New Jersey orders, plus all other orders unless specified otherwise. Mr. Dredge asked what the proposal is for the muffler in the ’64 line. Mr. Minkel answered that the quiet muffler will be made standard on the Avanti at new model time, and the price will be changed to include it. Mr. Feuer suggested the change be made at a time other than new model introduction time to avoid the look of a new model change and the resultant rebate."
Sounds like your car somehow escaped the scrutiny of the NJ authorities for the time you were there..