No, they're still in the right. The Freedom of Display the American Flag Act says they cannot prevent you from flying an American flag, but they can dictate how and when. They didn't ban the flag from being flown, they merely dictated it could not be flown during the Christmas season. They are well within the law.
He crying about it?
https://www.govinfo.gov/content/pkg/PLAW-109publ243/html/PLAW-109publ243.htm
(2) any reasonable restriction pertaining to the time,
place, or manner of displaying the flag of the United States
necessary to protect a substantial interest of the condominium
association, cooperative association, or residential real estate
management association.
The key is the determination of what constitutes a "reasonable restriction" and "substantial interest" under the law. I would argue that saying you can't just because it is Christmas would not qualify.