Watermelon is a common decorative element. I think we’ve got some watermelon ornaments for out tree. I think it’s probably because they are cheerful and red.
(I associate other fruit with stocking stuffers, not Christmas trees. Decorative glace fruit are a kind of celebration gift, that may be another connection.)
I take the “plug” to be a pagoda, because that’s also a common celebration decorative element hung on things. More of a new-year element than Christmas, but who’s counting?