I spent an especially unpleasant year under Muslim Brotherhood rule so have very little truck with people who like to tell you there's only one way to be a Muslim. This myth of orthodoxy in the practice of Islam is just not true. Many very observant Muslims still give Christmas presents or sweets to Christian neighbours, attend funerals, weddings and baptisms. I know that there is a Hadith saying that there are only two Eids and you can't celebrate anything else, but if you take that (or pretty much any religious ruling from any religion ever) to its logical conclusion then you end up being mental, and in this case unable even to let you kids go to another child's birthday party. Sadly some people do that.
All I'm saying is that there is more than one way to skin a cat and more than one way to be a 'proper' Muslim.
My DH does celebrate Christmas with my family but most of my family aren't religious and we don't attend church. We would go to church for funerals, weddings and baptisms and not do the praying bits. DH is not from the UK though I am, so at first he was a bit
about Christmas, family drinking alcohol around him but has relaxed a lot especially since he sees how much DC enjoy being with my family.
I don't know whether your DH is British or not, or whether he is very religious. If he comes from a Muslim country it may be that the child's religion is recorded on birth certificate and passport. Usually the rule is that if the father is Muslim then the child is too and it would probably be nigh on impossible for child to change their recorded religion especially if from Islam to another religion.
If he is religion then your DH might also be a bit weirded out by the idea that the DCs choose a religion when they're older since most Muslims think that the Father's religion determines that of the child. I would really recommend making a decision on this together before DCs are born.
In our case I think DH is willing to be much more open because he knows that DCs are Muslim and I'm not doing any conversion on the sly.