Yes, Carnival decorates for Christmas. Usually decorating starts right around Thanksgiving time. It isn't over extravagant. But nicely done. Usually the atriums and promenade decks are the most decorated, and a tree in the dining room and maybe a tree or two in other areas.
I was on the Carnival Glory last year from November 10-18. I noticed that they had Holiday decorations already set-up in the atrium. They had a modest Christmas tree set-up near the grand piano in the atrium. They also had garland set-up around inside railings of the atrium. Those were the only holiday decorations I saw on the ship.