Probably the most succinct historiographic survey of Puerto Rican attitudes towards the U.S. "race" notion is Clara E. Rodriguez, “Challenging Racial Hegemony: Puerto Ricans in the United States,” in
Race, ed. Steven Gregory and Roger Sanjek (New Brunswick NJ: Rutgers University, 1994), 131-45. The book is a collection of essays on recent studies of racialism in different groups, and Clara Rodriguez's chapter addresses Puerto Ricans in particular.
In short, there seem to be different reasons for Puerto Rican rejection of the "black" census label, depending on age and educational level.
Older Puerto Ricans are probably sincere. They tend to be extremely colorist and vehemently deny that there is any "black blood" in their own families (although they are not sure about their neighbors'). My 94-year-old mother, for example, insists that her ancestors were all "racially pure" Spaniards whose families were never tainted by the slightest trace of "Moorish blood." She checks off "white" because she honestly believes that she is "white" in the "limpieza de sangre" sense common in the early 20th century. When asked about their obvious African phenotype features, older Puerto Ricans (like older Cubans and Dominicans) rationalize that such features are due to their "Indian blood." (Yes, even while simultaneously insisting that they are pure White; Puerto Ricans compartmentalize as nimbly as anyone else.)
Educated Puerto Ricans claim to check off whatever seems to be in their best interest. They (correctly) point out that it is economically harmful to be labeled "black" in the United States.
Puerto Ricans of the lower socioeconomic class express virulent contempt for African Americans. They claim to reject the "black" category because they do not want to be confused with violent criminals, men who abandon their families, and women who fail to raise their children.
Virtually none, as far as can be determined, "are confused about what the US census folks mean," as you suggest. They know very well what "black" means. It is the label of a group that they want no part of, either because: they deny non-White ancestry, because they think anyone would be foolish to seek oppression, or because they despise black crime and immorality.
Regarding the "check more than one box" issue, I recommend Nicholas A. Jones and Amy Symens Smith,
The Two or More Races Population: 2000, (Washington: U.S. Census Bureau, 2001). Few Americans check off more than one box. Apparently, Blacks seem to think that doing so will dilute their political power, Whites are unaware of their SSA ancestry, and Hispanics avoid "black" for the reasons given but many check "white" and "indian."
I do not believe that the idea that people are confused or that they do not grasp the significance of the U.S. color line is a tenable hypothesis.