I wouldn't be happy about them being outside my house, because that is private property. If they were on the street I'd expect the police to move them on, because roads are for passage, not for hanging around on.
As to your point about being arrested, I've already said inciting racial hatred shouldn't be a crime. Therefore I'd see your arrest as state suppression of free speech.
One last point. Making direct threats against a person should be an offense, but that isn't what is meant by 'inciting racial hatred.'