It was those who misunderstood Germany's history big time!
More like they misunderstood how profoundly the political leadership and landscape had changed after 1933. Many leading political figures (e.g. Wilhelm II.; Hindenburg) had been raging antisemites, but not with the murderous intentions of Hitler. Jews faced numerous prejudices before 1933, especially those who wanted to belong to the societal elite, or at the university. The niece of Albert Einstein was told by her professor that "It was not to her advantage that her name was Einstein!" in 1928.
So naturally some restrictions initially did not bother them too much. They saw it as the new political leadership paying lip-service to their voters, like the fascists in Italy who introduced initially similar laws, but without murderous intentions. They miscalculated mostly because of Hitler. Most historians believe that while Germany might have become a dictatorship under a different leader, and sought a war against Poland (the Reichswehr made plans for this before 1933), it was Hitler who brought a murderous antisemitism to the equation. Again many others were antisemitc too, but few had the desire to bring them to their horrible conclusion.
Another point to consider is that for many German Jews, their jewish identity was non-existent. I am currently writing about the old widow of a highly respected professor, who was jewish by birth, but became catholic during childhood. She was invited to the most respected academic gatherings, and never considered herself jewish. She was warned by her son after 1936 to leave Germany, but she declined because she believed herself save. She ended up getting deported to Auschwitz and was murdered there.
Did you never ask yourself what made them so compliant?
Human psychology. You have this with many massacres during history, where relatively few culprits killed a large number of victims. Nobody wants to be the first to die, so they wait and hope for a miracle. They think that they can't be killed, that something or someone will intervene.
The Nazis were well aware of the potential danger caused e.g. by a large number of KZ inmates, which is why they took many steps to undermine inmate solidarity.