Well, I'm sure that it's possible to exceed the bounds of taste, even on Halloween, so I wouldn't say "absolutely anything goes." For sure if a neighbor child is having trouble sleeping, and their parents ask nicely, take whatever it is down. You can use it another year when the kid is older. And if a neighbor has lost a loved one to a violent murder or accident, use your common sense about what is kind.
But at the same time, I am not thrilled about the general trend in a lot of areas to defang Halloween entirely so that nothing that isn't appropriate for a sensitive toddler can be used. I mean, it's SUPPOSED to be scary. I get the difference between spooky and gross or violent. But I wouldn't limit displays and costumes only to the former. And zombies -- when, if not at Halloween?
I was sorry when my kids were little to see most Halloween events billed as "Fun! Not scary!" They turned the holiday into just a candy and costume party. That's fine for little children, but older kids enjoy confronting scary things that they aren't yet 100% sure aren't real. It has actual psychological value, in fact.
When we were kids (boy, do I sound like the geezer I am), we loved Halloween precisely because it was kind of scary. We weren't scared of ghosts -- not much, anyway -- but of being out in the dark at night, of older kids taking our candy, of getting caught when we played pranks, of the neighbor everyone "knew" terrorized kids, and so forth. In those days, in my suburban neighborhood, kids went out in groups of friends, not their parents (everyone always felt sorry for the one loser whose dad insisted on accompanying her). The littlest kids went with a parent or sibling early in the evening for a few minutes, before the real action started. That's what made it so cool -- the one night of the year when the neighborhood belonged to the children. And the urban legends of poisoned treats and razor blades in apples hadn't yet begun -- some people actually made homemade treats, like popcorn balls and cookies, which were always the best. I am not saying it couldn't or didn't happen, but I have no memory of anyone ever getting injured or harmed. And it helped us feel self-reliant and brave. I know it's not that way anymore, and I'm not criticizing parents who accompany their children. You do what you have to do. But it sure was fun for us kids then.
Anyway, I like to see Halloween be scary, so my vote is, with obvious common-sense exceptions, I vote for scary.