PMed you Tiger88...
Yes, perhaps a cardboard template, or any other malleable material. The area containing the overspray was either exposed, or the template was not laid correctly and the void allowed the particles to stain the flag.
Spray paint. 99,999%. On numerous occasions i have worked with spray paint and templates, both in army and civilian life. If is a liquid run, how come that in areas with a lot of "runs" all of a sudden sharp edges appear? Because the template was not properly sealed to the fabric when spray was applied. Look on the right side of the two circles surrounding the Swas. It's spray paint
If you'll look at the close-ups of the swaz arms inside the white circle, you can actually See the moisture staining and Yellowing between the 2 arms of the swaz and above it. No mystery here, guys-this flag got wet with something fairly strong enough to bleed the ink, is all. It didn't Soak the entire piece, but got on enough of it to ruin the area that it Did get on. Regardless, the flag is ruined and not worth considering. William
"Much that once was, is lost. For none now live who remember it."
Maybe some moron thought it would be "good" idea to touch up the color on the flag at some point??? I will still put my money on spray paint.
Or maybe the original color was faded and he made the thought "why don't make the colors a little bit more intense?"...