There is generally no problem with having a Nativity scene in your yard or in a front of a protestant church. I’ve gained what I believe is a better understanding on the whole statue/non-statue issue.
The protestant aversion to them is the same aversion they have to alcohol really(I know not all protestants have a problem with alcohol use). There is always a danger of a person using a religious image for a purpose it isn’t intended for. An example would be seeing a statue of your favorite saint and it bringing up memories of their life story in which you can reflect upon and come closer to God. That’s a proper use. Then there is touching or kissing it every time you go by out of habit instead of any type of emotional feeling or meditation on said saint.
In most cases, protestants are so scared of looking too Catholic, that instead of trying to put them in proper context, they say it’s all bad. Just like alcohol usage. Having a Nativity scene out once a year actually does cause reflection and meditation in pretty much everyone I’ve talked to. That is why most protestants have no issue with it.
If everyone would stop putting the wise men in the manger scene, I would be happy though.