I saw one propagandist disguised as an ACLU lawyer in an interview on "Fox News" defending Chicago's policy as a vindication of the Constitution's guarantee of church/state separation. Of course, this "constitutional lawyer" has to know better than that the Constitution contains any such guarantee.
Indeed, most of the opponents of the ad aren't seriously objecting on constitutional grounds because even the ridiculously distorted judicial precedent that has turned the First Amendment Establishment Clause into a sword against -- instead of a shield for -- religious freedom won't help them here. Instead -- as mentioned -- they are hanging their hats on the presumed "offensiveness" of Christianity.
People would be well served to understand the differences in these issues. While Christians don't set out to offend others, we must be clear that there is no right in the Constitution not to be offended. But there is a right to religious liberty, and it even applies to Christians.
The Framers deemed this right so important that they made it the subject of the very first two clauses of the very First Amendment: the Establishment Clause and the Free Exercise Clause, both of which were designed to safeguard religious liberty, not to separate church and state.
The Establishment Clause was intended to protect religious liberty by preventing the federal government from establishing a national church or religion. The Free Exercise Clause sought to do so by guaranteeing our right to worship as we please.
The zealous advocates of church/state separation and the opponents of Christian expression in the public square, in the name of promoting religious liberty go a long way toward selectively suppressing religious liberty: that of Christians.
So when you read about such controversies as the one involving the German Christkindlmarket, try to look behind the deceptive claims of the secular activists who are at best fair weather champions of tolerance, pluralism or constitutional religious liberty.