Muslims never approve lies in the name of Jesus. We do not follow those who attribute God and the Prophets with non befitting attributes.
What some people do in Christmas disagree with what all the Prophets came with. Muslims do not congratulate others for insulting God.
Muslims love all Prophets but they never worship any one except Allah the Creator of everything Who Has no similar,No wife, and No son.
The word Christmas is made up of two words, the first word is Christ and this word is a Greek word and it is of Hebrew origin and it means the Messiah which refers to Prophet ^Isaa. The second part of the word Christmas is the word mass which is a Latin word and “mass” used to be said at the end of their service by the priest. The word mass according to the christians means to send. When this word mass was said they meant that the worship is sent. Some said this word Christmas meant the worship of Jesus.
Some said that Christmas meant the festival of Jesus. If you take it as the festival of Jesus even in that scenario you have to bear in mind that the Christians mean the festival which relates to what they call the birth of the son of God. Some among them even say the birth of God as a baby. When they say Christ they don’t mean Prophet^Isaa as we say rather they are referring to what they call the birth of God or the son of God.
Modern day: When people say Christmas they refer to the 25th of December. If someone said merry Christmas whilst meaning happy or joyful celebration of the son of God then this is blasphemy, or if someone said merry Christmas and they meant the holiday then it is Haraam. If someone said merry whilst knowing this word can mean high status or honorable the judgement of that person is that which they spoke is Kufr even if you said merry 25th of December, whilst knowing the word merry could mean honorable.