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
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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.