offmychest

It's effectively a form of intrafamily abuse. People that do this generally are more ready to do it amongst their family than in public. If you actually call them out on it, they'll act indignant and insulted, as if it is you that are the one at fault for making things awkward during Christmas. They're betting that as long as no one in the family is a member of the vilified group, then it's not a personal insult against anyone in the family. But if you call them out on it, suddenly you're the one insulting a family member.

it is a form of familial abuse. They use their family as a captive audience, leveraging social awkwardness as way of airing despicable opinions they couldn't share in polite company. if you call them out on it, they'll say "I'm just joking" and portray you the bad guy for calling them racist.

The sad thing about the situation is that it's actually less socially awkward to just let the racist comment pass, change the subject, and move on to something else. Calling them out could cause a huge fight that could ruin a whole evening. Saying nothing is the path of least resistance, and ultimately it's rare that anyone of the targeted group is actually present. So calling them out isn't going to directly help or defend anyone there.

It's a form of abuse. They're making everyone else either commit a social faux paus or sit quietly and let them get away with their racism. They're abusing family and harnessing familial loyalty and kindness as a way of airing their despicable opinions unchallenged.