It's also the arrangement that Casimir the Great is said to have had with his Jewish mistress Esterka--the sons were Christians, the daughters Jewish. Some noble families traced descent to the former. It was an illegitimate union, of course, but it's another data point.
There were also marriages between Polish Tatar nobles and their Catholic or Orthodox neighbors, but that also tended to involve conversion, if not of the parents then of the children, to Christianity (since Muslims marrying Christians tended to be social climbers--much like Jews marrying Christians). As the recent Young Pilsudski television series put it, discussing Aleksander Sulkiewicz's offspring, "You a Muslim, she a Calvinist--and what will the children be?" "Catholics, obviously."
It's easy for the Ottomans and other Muslim dynasties to do because of their vast harems, but it's much harder to pull off for Christian monarchies, both because of the monogamy rule in Christianity and because the politics of marriage don't make it advantageous for the overwhelming majority of Christian families. The only places where I can see a huge benefit for marital alliances between Christian and Muslim nobilities would be in the Outremer or in those parts of Europe that border the Ottoman Empire--Poland-Lithuania, Wallachia, Romania, Hungary, etc. How much Christian-Muslim intermarriage was there in those Christian parts of Europe that bordered the Ottomans?
I think the Pope might actually be very enthusiastic about it. Many European pagan kingdoms were brought to Christianity by pious Christian wives, after all--the hope of baptizing Bayezid the Thunderbolt could make him extremely excited.
For a long time (and still as a minority opinion after), Islam was viewed as a heretical offshoot of Christianity. But even in a lot of Catholic-Protestant or Orthodox-Protestant or Orthodox-Catholic marriages, conversion was expected (Nicholas II's German wife had to enter the ROC, for example)--so you'd need Islam to be unrecognizably closer to Christianity for that.
