Aww, I'm sorry Mylo. It's all right though. Tell them you make about 1000 dollars a suit or more and you do them on the side. They may leave you alone once they hear how much you get paid, regardless of what they think. They might ask you then to make them one, who knows. I'd say, ignore people. You might win some people over through curiosity if they aren't still making fun of you. If you do keep working in the same place, they might come back and watch, but treat them like curious animals or something and just go about your business. Don't let them cause you fear or embarrassment.
I would tell them what they wanted to know or needed to know if it was a question that was uncessary for an unintended encounter. "I'm making a costume for Rens fest, Comic-Con, costume contest, charity." Shoot, make up a story about a sick kid or sorts and maybe they'll console and leave you alone then. Either way, keep at it and don't let people by their definition keep you from completing what you do.
Frankly, I'd say keep working in the same location. If you are in the dorm and on the property and its free for all students and you have a right to be there. They don't have any right to get you kicked out or anything and no choirs are practicing in there. I'd say stay there for the sake you mentioned. If it gives you room and you clean up after yourself so nobody knows you were ever there, I don't see why not stay there. I haven't had this happen to me before, but I wouldn't let it screw me over for a good place to work, lol.
I don't know why they'd laugh. if someone can't tell you're wearing a costume, then they must be dumber than a doorknob XD It might help them go away if they knew what they were too dumb to figure out. You ARE making a costume and you were trying it on.