I had this very argument two weeks ago at a party and I was in the "it's not a Christmas movie" corner. After reading the (beautifully researched) article, I have now changed my mind. I now think it's a Christmas movie -- mostly because the writers intended for it to be one :D
The author lost me when he said that “Last Action Hero” is not a great movie, so I wouldn’t take anything he writes about movies as serious. John McTiernan is a genius.
I never understood why that movie bombed. 1993 was a huge year for blockbuster movies, so I think it just got lost in the shuffle. Anyway, underrated flick.
It's a Hollywood story cliche. There are so many continuity problems in that movie, but if I recall, they were designed to be that way. Here's a decent write up about the whole preposterous nature of the movie: https://film.avclub.com/why-last-action-hero-failed-and-why-...