I don't think it has to necessarily butterfly Islam. The PoD is the year of Mohammed's birth, so he very well may still be around. It would be acceptable to assume that nothing much would come of him, but I don't think it would be out of the question for Islam, or something very much like it, to arise. The socio-cultural environment is still there, just subtly changed, and the man himself is likely to be alive. So in the interests of having something to talk about, I'd say not butterflying Islam would yield greater speculation material in this case.
If a young Muhammad rejects Meccan paganism, he may instead of going to a mountain and meditating, he turns to Ethiopian Christianity.