It is a classic case of sensational headlines that belies the facts. What they quote is a letter from his future sister in law telling him don't go muslim because she feared he might become too oriental like some other british of his class [such as Laurence of Arabia].
Everybody knows that Churchil condemned the quran and the teachings of Muhammad. Being one of smartest Britons and of the imperialist officer class Churchill obviously knew the art of going local to attain favors of certain native elements and how to play conflicting locals against each other so to prevent them uniting against the Brits.
The British were brilliant in managing empires and that's how they could rule over huge areas that were heavily populated such as India. The quoted woman must have been a naive person. But Churchil obviously wasn't a fool like Laurence to actually become 'native'.