The WIA flag folder has two flags that are designed for the upper left-hand corner of the screen with _alt in their names.
The AME_alt_flag looks like the american flag that is supposed to appear in the war of 1812 scenarios, but doesn't.
The ENG_alt_flag looks like the union flag that is supposed to appear in all of the scenarios before the 1812 scenarios.
Are these supposed to be switched manually, or is this just an oversight?
Non-tecnical translation for those not into flags:
The thin diagonal red stripe on the English flag should only show up during the Napoleonic Wars (i.e. the 1812 scenario). Before that the flag was simply a red cross of St. George superimposed on a white cross of St. Andrew, representing the Union of England and Scotland -- hence the name Union flag (it's only the Union Jack when flown from one particular mast on ships).
The American Revolutionary War flag generally has thirteen stars in a circle on its blue field, much like EU flag. After the war they stopped putting the stars in a circle and scattered them across the blue field to make it easier to add stars whenever they added states. The 1812 flag looks a lot like the modern flag, only with a lot less stars.
Having a light mix of 'modern' and thirteen-star flags doesn't bother me in 1812 scenarios because Americans tend not to throw away their old flags. (When the U.S. switched from a 48-star flag to a 50-star flag Eisenhower issued a presidential order to keep using the old flags until they wore out, except on a few prominent buildings). But it would be no big deal to make a flag for marking control of a region (the small bitmap flag) that didn't have its stars in a circle (involves recoloring six or seven pixels, at most). Changing the diagonal flags would be a bit more work, but not a problem. The bigger issue is getting the flags to appear in the game at the correct moments, which they aren't doing right now (probably because nobody remembered to get hot and bothered about it).
I'm not comfortable with the Colonial faction flag, but am not sure what to propose in its place. The flag that's being used is one of the flags that preceded the thirteen star Revolutionary War flag. It was only flown in 1775 and early 1776, and may have been in different forms with different colored stripes (red, white, and blue stripes is the most common variant). The history behind the flag is confused and interesting -- apparently it was something that was whipped together on the spur of the moment, and the Americans who decided to fly it were apparently unaware that in its most common form (Union flag in the corner on a field of red and white stripes) it was identical to the flag of the East India Company. What I am fairly certain of is that no one would have thought to use it to identify a group (other than the East India Company) before 1775, which leaves the problem of what to use. The question needs a lot more research, but off the top of my head I would suggest either the Red or the Blue Ensign (Union flag in the corner on a plain red or plain blue field).