It's based on a real legend! More specifically, it's based on Câmara Cascudo's Geografia dos Mitos Brasileiros, where he talks about a small town in the Northeast. It used to be called "Anta Esfolada" (Skinned Tapir) and it indeed had the legend of a hunter skinning an allegedly demonic tapir. Later the city abandoned this very pagan name and became Nova Cruz (New Cross).
The general region/state where this happened has all the elements you find in the Hinterlands. For instance, a good chunk of its economy revolved around raising cattle, whose meat would be salted and sent to the coast. The whole Hinterlands section is an amalgamation of many stories and notable landmarks, all from that region.
If you have any questions I'd be glad to answer. But if you want to find out more you can research "Anta Esfolada Câmara Cascudo" and you'll find others who mention this myth... But you'll need to know Portuguese haha.