I disagree with the casual invocation of "blackface" and its concomitant iterations to describe actors of one ethnicity playing characters of another ethnicity.
Unlike black and Asian actors' organisations advocating for their hiring in an effort to bolster employment opportunities, I don't believe Jews have ever been marginalised in the show business realm.
I admit that there is a regrettable history of Jewish actors "goying" up in order to hide their heritage. Edward G. Robinson, Paul Muni, John Garfield, Kirk Douglas, Lee J. Cobb, Lee Grant, Judy Holliday, and the list goes on and on.
I am not terribly conversant with the British-Jewish acting community, but from my American perspective, British Jewish actors have always just seemed "British" to me and have never stood out as Jews (unless they were trying to). The Golders Green accent is not one that hits my ear very strongly unless it is exaggerated in the Alec Guinness-as-Fagin mode.
One of the great TV casting ironies- which was repeated by its American counterpart- was in casting a young, Jewish actor- Warren Mitchell- to play the old, Protestant racist Alf Garnett in 'Til Death Do Us Part. (Similarly, Irish Catholic, patrician Carroll O'Connor made TV history as bigoted Queens Protestanr Archie Bunker in All in the Family.)
To think of these performances being vetoed because of a flap like this Falsettos contretemps makes me shudder.