I'm not sure on the exact reaction however, i do know that Shakespeare used events and occurrences throughout history to speak contextually about his own time. It was a work of fiction, and the Victorians accepted that and for this reason there was a never a huge backlash for any of his plays, namely Julius Caesar that spoke about a dictatorial leader that was killed as a result of his hubiristic nature at the hands of the protagonist Brutus. They didn't respond in a way that would be consistent with a controversial definition, and i assume, there was a similar notion and reality to the reaction of Othello