Really have a couple of debates going on here:
1. What was the first muscle car?
2. When was the term "muscle car" first used?
Maybe a third debate; When was the term "muscle car" commonly used?
The Fiat S76 gets my vote as the first muscle car in 1910. 300 hp (at 1,000 rpm) in a giant 4 cyl engine.
Watch this video:
https://theoldmotor.com/?p=146640
As far as the term, muscle car, I doubt you will find an earlier printed example than Popular Mechanics in Jan. 1964, but it certainly does NOT apply to what we later referred to as muscle cars. It was in reference to a Land Rover, and it was hyphenated; "muscle-car", describing a very spartan vehicle with no frills, but with some muscle.
The first reference that could be found for "muscle car" (no hyphen) describing a 60s car is in the Oct 1965 Popular Science: "DODGE CORONET becomes "muscle car" with Hemi-426 engine, but relies on drum brakes only. Rally suspension makes car remarkably well-balanced and good-handling." Note that it is not claiming the Dodge to the the first muscle car; just that the hemi made it one.
Frankly, I don't remember using the term in every day language until the 70s. I am always skeptical of anecdotal references such as "we always called them muscle cars in the 60s". Memories fade.