My interpretation was that 'hundaĉo' doesn't literally mean 'mixed dog', and they just chose 'mutt' for its negative connotations. In which case, the Esperanto sentence doesn't make sense, even if the English one does. But I guess what I'm concerned about is that my interpretation might be wrong, and 'mutt' really is a literal translation of 'hundaĉo', which has some implications I really don't like.
Rest assured, the literal meaning of "mutt" and "mongrel" (i.e. a mixed-breed) is apparently "hibrido" in Esperanto. Though of course it can refer to any animal or plant that is a mix of two or more species or races, so you can use "hibrida hundo" or perhaps even "hibridhundo" if you want to be more specific.
And PIV apparently gives the definition "malbela hundo" for "hundaĉo", which gives a possible explanation for this sentence.
Mi estas Brazilano, kaj al ni la vorto "mutt/mongrel" can totally means "inferior"... we say here that the Brazilians have a "mutt complex"...(But I think we just inherited this from the Portuguese people - Looks like they also suffer from this problem) because "we"(not me) normally only say bad things about our country and don't recognize our strengths. And sometimes your hear people using this adjective referring to other people, trying to say that the other person is an inferior person.
Estas multe da homaĉoj nun en filmoj kaj televido-serioj kiu estas aminda. La plejparto de la ĉefroluloj en nuntempa populara kulturo estas aĉaj, sed ĉiuj ankoraŭ amas ilin. "Aĉa" kaj "aminda" ne devas esti reciproke ekskluziva.
There are lots of awful people now in films and television series who are lovable. The majority of protagonists in current popular culture are awful, but everybody still loves them. "Awful" and "lovable" don't have to be mutually exclusive.