@WingbeatPony  
After watching again, another explanation is that the lyrics were correct, she just sang them in a way that results in a non-traditional interpretation because of the circumstance, like singing about having a gay old time under circumstances that reflect the modern meaning of gay.

Derpy accidentally broke that ornament into a bunch of crackly little pieces.

@Stotter  
I think the more likely (tvtropes) explanation is that for this line, the musical world hypothesis briefly shifted from diegetic to alternate universe. That is, they were all actually singing a real song in-universe, but the lyrics momentarily shifted to apply to events presently taking place. FWIW, most of the songs in MLP have followed the alternate universe theory - ponies do randomly burst into song - and it’s rare to encounter a song in-universe, especially in a musical episode.

Did she flub a line of the traditional song or is dropping an ornament after being told not to part of tradition?