I don't think it's the case, since the only difference between mist and fog is that it's called fog when you have a short range visibility. So if you cannot drive because there is "neblina", it's definitely a fog.
Just my 2 cents.
Yeah, kind of...the meanings are definitely close enough. Just that, 'neblina' is definitely a noun, whereas, 'misty' is more of an adjective.
Depends on how strict/literal they want to be.
Considering Portuguese would hardly use an adjective form for this sentence, "when it's misty/foggy" seems to suit this one very well too.