The rapper and music mogul, 55, has been locked up at the notoriously tough Metropolitan Detention Center in Brooklyn, New York, since September and is awaiting trial in 2025 on charges including sex trafficking and racketeering - all of which he strongly denies.
A source has told The Sun he had to be taken for "observation" during the festive period because he allegedly could not believe he was still behind bars for Christmas.
"With his high-powered legal team Diddy thought he'd be out on bail by now," the insider said.
"Spending the holidays behind bars was a nightmare for him.
"He eventually managed to calm himself down with the meditation technique he's been using while he's been behind bars.
"It took him a few hours of deep breathing and focusing to get out of the bad space he was in, but he finally managed it."
Another source close to the disgraced rapper denied the claims he suffered a "meltdown".
They told the Daily Mail the rapper was continuing to stay strong in prison.
The reports come after a legal expert said Combs' bleak Christmas behind bars was a "reminder of the seriousness of the allegations against him".
James Pipe, from freegrantsforfelons.org, told the Daily Star: "The stark contrast between Diddy's past life of indulgence and his current circumstances highlights the profound consequences of legal and personal accountability.
"While the festive season might offer moments of muted cheer for some inmates, for Combs, it serves as a reminder of the seriousness of the allegations against him and the impact of his actions on others."
It's been widely reported Combs and his fellow inmates ate a Christmas Day meal of baked Cornish hen, macaroni and cheese, cranberry sauce and dinner rolls, followed by a "holiday dessert".
He said the jail ran a "no frills" and "no luxury" regime.
The comments on Combs' grim Christmas come after it was reported he has lost a huge amount of weight behind bars, according to a journalist who attended his last court proceeding.