Corrected entry: There is no way any of the characters couldn't tell the magician's assistant isn't a woman but a guy in disguise.
Correction: Who's to say many of them didn't? So the magician's assistant is in drag. It's a costume party, after all.
Terror Train (1980)
1 corrected entry
Directed by: Roger Spottiswoode
Starring: Jamie Lee Curtis, Ben Johnson, Hart Bochner, David Copperfield
Continuity mistake: Kenny must be fast. He's disguised as the female assistant at one point then minutes later he's disguised in the Groucho Marx costume.
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Suggested correction: It's not a full costume. Kenny steals the mask and what looks like a small waistcoat (leaving even the hat). It's not implausible that Kenny made a quick change (probably after killing Ed) to formal wear (which isn't what Ed was wearing). After Ed's murder, Kenny-as-Ed appears briefly only from the waist up (showing only the stolen mask and waistcoat), and then doesn't appear again for quite a few minutes, more than enough time to change to the formal wear.
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Correction: Honestly, I was fooled when I first watched the movie (Derek MacKinnon is a drag performer in real life). Also, the assistant keeps her distance from the passengers during the train ride. Until the climax, she's only seen onstage, or alone with the magician (who presumably knows). She even walks away when the conductor briefly speaks to the magician. And she disappears for long stretches of the movie, because Kenny is moving around the train, wearing other disguises, to commit the murders.