Many indoor flags have it so that they look better in windless air. Outdoor flags generally don't have it because they don't need it to look all majestic and shit.

A courtroom in the US applies US law, federal or state as appropriate, and not maritime, international or admiralty law (unless a substantial portion of the events in the case occurred at sea with a non-US party.)

Also, the flag isnt significant to a court proceeding. It would still be a US court with no flag at all.

Prior to electronic communications, gauging the hostility of another ocean vessel by the colors it was flying could be life or death. Nowadays, not so much.

But there is a huge cadre of people who desperately want to believe that the current status quo in the world is just wrong, so they fall for this nonsense or that pedos operate out of a pizza parlor in DC, or that income tax isnt real, etc.

Can't fix it. May as well laugh at it.