The Deutsch family website also has a page dedicated to Moritz (who might well have been Moses) and Hermine and their descendants: http://www.cs.technion.ac.il/~janos/FAM-TREE-04/hermine.html
Apparently they were able to escape to Paris in 1938, and from there on to New York in the end.
I don't know the specifics of the Austrian court, but in general there are two types of warrant, of which the second one was easily received after a King/Emperor had bought a piece of jewellery somewhere. So the Oesterreichers could have been called suppliers to the court, without actually having KuK status, but again: that is the general situation and I don't know the Austrian specifics.
Regarding the claim Moritz was arrested in 1938: the source was the Jewish Chronicle, which seems to be behind paywalls. Either the report is mistaken, or he paid himself out of the situation.