The flag was an actual proposal for the west German flag, I believe. I have also read it was a flag considered by the July 20 conspirators. Two ways this might happen, both unlikely:
(1) The July 20 plot succeeds and the new German Government essentially unconditionally surrenders to the Wallies. Wallies occupy Germany but are willing to deal with provisional Junta until Allied-supervised election are held. Hostilities between Wallies and USSR seem emminent so this new Germany is added to the western alliance structure as soon as possible. War starts in 1952 and Rommel, who would have been a very useful and respected figurehead for the "new" "New" Germany, as well as the occupying Wallies, gets the job as commander of NATO.
(2) July Plot goes ahead but fails. Somehow Rommel survives purges. War ends basically as in OTL with Germany divided between Wallies and USSR. Cold War starts as in OTL. West Germany is formed in 1949. Perhaps some Berlin Crisis flares into temporary hostlities and Wallies decide to fast track West German membership in NATO as a defensive measure. Rommel, who has been promoted as a "good" German by the Wallies since 1942 is give largely ceremonial role as commander in chief of NATO.
One problem with either scenario is Rommel himself. Although he had a number undeniable good traits, was an honorable military commander, and was at least somewhat supportive of the 1944 anti-Hitler coup attempt, he is not unstained. He was a very willing supporter (and member, I believe) of the Nazi Party in his earlier career, and was very sympathetic to the nationalistic goals of the Nazis which led to WW2 and millions of deaths. Like many military men he turned a blind eye to the Nazi's racial policies - and certainly felt that the Nazi's other "good" traits more than made up for their unfortunate habit of murdering millions of civilians in gas chambers. That is, until he felt the Nazis and Hitler were making bad military decisions. Had he not been forced to kill himself during the purges, it is entirely possible he may have been brought up on charges by the Nurnberg court. He oversaw the construction of the atlantic Wall by slave labor. He was a very willing participant in the Nazi's military and diplomatic policies to overturn Versailles, etc. Like many German generals in his position, he would probably have been acquitted (or given a very minor sentence), but there is very little likelihood that NATO would select someone just let off by a war crimes tribunal as its first commander.