Whatever name you give your child - as long within the Standesamtsrecht - it is your decision. But you do see the issues it can cause.
Why does the US want your husband to change his name? Is it too long, too?
And that a passport aplied from abroad can only have 20 characters does not seem to make sense to me: My passport (including my very first one in my life and the most recent one + my children) were applied from abroad (the US consulate in Germany to be exact) and my name and those of my children have 20+ characters too (under 33 characters though).
And the "von" is not illegal per se, but since Germany abolished royalty, there is just no King or Emperor around who can give you a "von" title
