I think thats too funny.
I haven't researched the story, so forgive me if this sounds ignorant, but is that the actual picture of the piece of art? If so, then it doesn't seem as if it would be too traumatizing to children. It certainly isn't graphic, and Santa doesn't appear to be in any pain.
For the most part, only adults or mature children would understand what is happening to Santa in the artwork. I can easily see how someone could be offended, but certainly not traumatized.