The bris picture is just a distraction.
I have to say, even being on the evil, misnagdish, hater side myself, I don’t see why we say putting pictures in a stroller, Sphardim kissing pictures of the Baba Sali is all fine, but when you put the picture under a pillow it’s full blown avoida zara. It seems like circular logic: “What’s a Chabad minhag that’s A”Z? The pillow picture. Why is it A”Z? Because it’s practiced by a people we suspect of avoida zara.”
For that reason, I don’t agree with using the pillow picture as a source of the problem.