A few considerations: The candles probably weren’t left lit all the time, since candles were expensive.

The tree was probably very fresh, and cut locally rather than being shipped in. Also, Christmas Day was the beginning of the season, not the culmination (as it is now, where the beginning of the season is Black Friday), and so people wouldn’t have a tree up for weeks ahead of time.

People were used to handling fire and would probably have placed candles in such a way as to avoid lighting needles.

Last, houses without central heating were probably much cooler and more humid, and would dry out a tree more slowly than a contemporary home with forced air heat.

These aren’t definitive, but they are some thoughts. Now, I’m in no hurry to put candles on a tree in my house, but it must have looked pretty cool in the day.