Christmas is de facto celebrated by both Christians and non-Christians (see Japan, for example). If Winterfest were covering all the holidays, as you posted it does, then why are both Christmas and Chanukah not sub-categories of Winterfest instead of being independent categories? To me, it seems as though the Lindens have decided that Winterfest, Chanukah and Christmas are three separate holidays. The general consensus of merchants listing on Marketplace seems to be to put winter holiday items in the Christmas category, to judge by the wide disparity of number of items in Christmas versus Winterfest.
I already have appropriate keywords so my current items can be easily found in search. As a person who uses Marketplace search myself, it would be easier if there were more categories and more specific categories, especially for categories where there are thousands and thousands of items.