I like this proposal. It's better than the current system, yet easy
to understand and consistent in its use. Whether Rich cares to switch
to this scheme (especially in the middle of a game) I don't know. And
it would probably be better to call this "coat of arms" given the
milieu. Masking your coat of arms was even a common practice in real
life (mostly amongst shamed knights).
Some thought also should be given to how counterfeitable the flag is.
Currently, the faction system (in regards to DEFEND) is perfectly
reliable. With this system, it would be interesting to have skills
such as "Create a fake coat of arms" to appear to be in a different
(or nonexistent) faction.
-- Scott T.