User blog comment:Miskos3/Fairy Tail Chapter 374: Revolution, Review/@comment-24467372-20140307160834/@comment-7418318-20140307172742

Jose would have had to let his hair and beard grow quite a bit to match this appearance, which is possible. With his self-confidence being being broken and his guild being taken away from him, a lapse in taking care of his outward appearance wouldn't be a big surprise after all.

But I don't think Lucy, Natsu and Happy would be quite as surprised and terrified if it was Jose. Particularly Natsu, since during the Phantom Lord arc he was even trying to find and attack Jose at one point, but ran into Aria and Gajeel before he got the chance (lucky him).