Quote Originally Posted by Zardoz View Post
That violates the Flag code, (Section 8d): "The flag should never be used as wearing apparel."

According to the Flag Code, a flag is anything "by which the average person seeing the same without deliberation may believe the same to represent the flag."

These rules are not really enforceable laws, but violations should be handled by concerned citizens. If I had been there I would have verbally made that woman feel pretty bad about wearing the flag as underwear.
And she, could have as easily made you feeling even worse about sticking your nose where it didn't belong, so to speak.

The flag code, as you note, does not have the force of law whatsoever. What does have the force of law are constitutionally protected rights to freedom of speech. That this first amendment right encompassses the use of the American---or any other---flag in ways that communicate and express has long been settled by the courts.