Wow. This one is a hard one.
1. Be ever so grateful that your husband takes an interest in this. Him stepping in in a not so perfect way is better than him keeping out of it.
2. So...be very careful how you approach this. Many men, in their defensive mode, if they feel disrespected, will go to the other extreme. And, you definitely don't want that.
3. I would wait only until I knew I could remain calm. And, I wouldn't make it a huge issue that ends up in a fight. Just mention some things. Then, let it sink in for awhile. Then, later on, if it continues, keep mentioning it (but don't start nagging).
4. If it never changes, don't ever show your son your pity for his fear of his dad. That will in turn only undermine your husband - which is what you don't want in the first place. Only support your husband on this if he insists this is the best way. Tell your son in that circumstance, that his dad loves him and you and wants to make sure you know right from wrong and he has the right to discipline you. He's your father. He also loves you too much to allow anyone to disrespect you and you appreciate that. You only hope he will want to treat his wife in the same manner.
I wouldn't like it either. I'm not saying don't try to fix it. All I'm saying is be careful and wise on when and how you do it, and then give him time. Then, if it doesn't change - show him respect anyway. If not, you might make matters much worse.
Make sure your husband understands that you appreciate what he's doing. But, that 2 consequences are too much. Maybe just a scolding/rebuke would be sufficient after you have already punished him. Ask him if he feels that you aren't punishing appropriately? and if that's why he's stepping in - because he doesn't think you handled it well? or is it just because he is really trying to do the right thing? Knowing why he does it will help you resolve it and come to a compromise.