Section 5 of the Public Order Act 1986 states words or behaviour, or disorderly behaviour, or. (b) displays any writing, sign or other visible representation which is threatening [or abusive], within the hearing or sight of a person likely to be caused harassment, alarm or distress thereby."
Displaying that flag clearly breaches this, so when the police view the footage of the idiots fighting in order to prove the assaults, then they may also want to speak to the guys displaying the flag