I've meant to respond a couple of times with this exact explanation, but I thought it was generally assumed that this is what we we were thinking. The guy is a blow hard. He talks way way too much. When you an anti PC guy, with no experience in politics, and you talk a lot - guess what? You are going to say a few things that are totally outrageous, particularly when viewed on a stand-alone basis without any further refinement of what was meant. Here's my take, and I said it from day 1 - Trump probably meant to say that the moratorium for immigration was to be from Muslim countries where there has been a history of terrorism. The next question is, if he misrepresented that, why didn't he take it back? Great question, and one we will hopefully get an answer to some day when Trump's autobiography comes out. My guess is that the guy learned from an early age that acknowledging mistakes is a sign of weakness. He rarely does it. He won't say "I was wrong". What he may say is, "I have changed my mind", or, "I have evolved". It's one of my biggest problems with him to be honest. I think it borders on unnecessary and unhelpful hubris and hurts him way more than it helps.
Of course, I could be wrong and he knows exactly what he is doing, and he really is a bigot. I have to concede this as a possibility. I wouldn't presume to make any definitive declarations about what is in a guy's heart, and I can't understand why people on the Left feel that they have the magical ability to do so.