There certainly is mass confusion on that point.
When it hit North Carolina it was still a Cat 1 briefly, and I have not read about anyone claiming otherwise.
On the second landfall, near NYC, however it's a different story, because by then it had attenuated to a Tropical Storm, although the "mine was worse than yours" crowd are adamant that it was still a Cat 1 hurricane.
If we're going to have definitions, let's not allow the hysterical to manipulate reality.
As states farther north can testify, a Tropical Storm can be just as bad in terms of destruction, if not in lives lost.
Maybe the smartest thing people say about hurricanes is that they are unpredictable. Where I live in New York, we were treated to extra rain as the rain portion of the storm seemed to have a ‘tail’ hanging down. Maybe the same happened up in Vermont where some places really got flooded.
IIRC, the 1938 hurricane had a forward speed of about 60 mph when it reached New York, the highest on record. That made for quite high winds on the right side of the storm and relatively low winds on the left side. And that spared NYC the sort of damage suffered out on Long Island and in coastal New England.
Location, location, location. ;-)