This is nothing new, people expect religion not to be part of the "professional" environment. Dunno if VS code applies.

At the office (big corp) they don't call it the "Christmas Party", it's "the holiday party". They put lights and stuff up but no more Christmas trees/stars etc.. not everyone celebrates christmas so that's fine by me. If Microsoft wants to put a little santa hat on their product that's fine by me too. If I was using some service based in Mexico and they put a little hat on a product for cinco de mayo i wouldn't care. Christmas has other implications so it might be different, dunno