"This strikes me as a fairly reasonable compromise."

A reasonable compromise between religious freedom and anti-Muslim prejudice?  The only reasonable compromise with groundless prejudice is to make no allowances for it whatsoever.

"I suppose the enforcement aspect would be to simply give public workers the right to refuse to administer service, at their discretion, "

If you don't *need* to see the person's face in order to serve that person, then you should just do your job.  We all know how this "discretion" is going to turn out... sunglass and balaclava wearers can ride the bus and niqab wearers can't.