Santa isn't omniscient. He sees you when you're sleeping. He knows when you're awake. We can infer from this phrasing that he can't see you when you're awake. He also knows if you've been bad or good but that information isn't as specific.
I reckon he knows if you've been bad or good because of the parents' assessment of their children's goodness. That is not a specific Santa power, except in as much as the power of Santa to get that parental assessment is a power
I think it has to be based on the parents, as clearly bad kids still get presents, and only their mother thinks they're good.
Be the Grinch. Get ostracized by looking different. Slowly get shunned from your community and froze out. Be ignored. Everyone hates you for no reason.
They rub it in your face by being as loud and noisy as possible. You tried to get away but they still flaunt it in your face. Only your best doggo understands and loves you still.
You go down and try to stop it and take their shit. Next day, they're still singing their fucking songs. You give them their shit back and NOW they like you.
Lesson: Nobody will like you until it looks like you did something good. Even if it was just a problem you made and you fixed but nothing actually changes.