He finds out that Santa, a man with God-like attributes, is a fake. It's often used as an effective, if harsh, way to bring an unruly youngster back into line at this time of the year. The Santa Claus lie destroys the child's faith in his parents. It is quite a shock when he discovers his parents have been lying and laughing behind his back all these years. He was a fool for fighting to prove them right at school.
Credibility is gone.
Doubts and suspicions linger long in his mind. This myth tends to teach children salvation by good works. This is not true. Salvation is in one trusting in the blood and righteousness of Christ. It is not any kind of good works performed by man.