[Balthie]

After a lot of baffling tests, I think we've come to a conclusion.

I'll get right to it-
It seems like trading at all if you have a claimed flag in your inventory makes the flag no longer display its guild badge. EVERY flag in BOTH participants' inventories. Even if the trade window is only opened and nothing is traded. The badge will no longer show if you carry the flag, nor if you place it.
It also seems as though if you place a broken flag, leave the house, and wait for an hour tick for it to refresh, the image returns on the placed flag. You can then even pick it up and carry it again, with the badge.


We tried just about everything we could think of. Placing it to have the other person pick it up, using shopkeepers to trade flags, and just about all permutations of trading (both people having claimed flags, one person having flags and receiving an item, one person having flags and giving an item), but it seems as though just opening the trade window at all essentially bricks all claimed flags in your inventory even if nothing is actually traded, essentially forcing you to place them, leave, and wait- which could well be tens and tens of flags, as was my case. Reconnecting does NOT fix bricked flags, only the house method does. Unclaimed flags don't seem(?) to get broken in this manner.