Flags are a cosmetic item that was released July 1, 2017. They were released on the occasion of the Canada Day and the Independence Day.
When equipped, a banner with the said flag appears on top of the user's head.
Similarly to Particle Effects, Flags do not automatically unequip when the user goes to a different server. However, Flags will unequip before the game starts, but reappear back when the game ends.