Here is my two cents....
I have never been in the military, but the way it has been explained to me is that military uniforms have the flag with the blue field in the upper right...Because that's the way the flag looks when you lead into battle...picture the civil war days when you had flag bearers charging, that's how the flag would look.
I've never heard that it means treason and if they were trying to make a statement by sewing it on differently on their uniform how far would that really go. Don't you really think that some C.O. would notice and take action?