This has actually bugged me since the LF was introduced. Besides having the wrong flag hoisted up, the shadow appears it is on fire or something. A wispy trail to it appears and suddenly disappears. See this handy video with a bunch of flags lined up:
It's not the wrong flag, it's the special Legendaries' flag (hence having the Legendary logo on it!) Shadow bug has already been sorted on the dev servers, it'll be fixed in the next update.