The whole thing is super dumb, as you said, burning the flag is the proper way to get rid of one no longer for for display (imagine the flag hanging out of a bin or something).

You know what’s also against the flag code? Plastering it everywhere that’s not a flag, like towels or whatever. But the flag code is only binding for government bodies if I’m not mistaken.

But yeah, the whole thing is just stupid.

Yes. Under section 176, we see this – emphasis mine:

(i) The flag should never be used for advertising purposes in any manner whatsoever. It should not be embroidered on such articles as cushions or handkerchiefs and the like, printed or otherwise impressed on paper napkins or boxes or anything that is designed for temporary use and discard. Advertising signs should not be fastened to a staff or halyard from which the flag is flown.

(j) No part of the flag should ever be used as a costume or athletic uniform. However, a flag patch may be affixed to the uniform of military personnel, firemen, policemen, and members of patriotic organizations. The flag represents a living country and is itself considered a living thing. Therefore, the lapel flag pin being a replica, should be worn on the left lapel near the heart.

(k) The flag, when it is in such condition that it is no longer a fitting emblem for display, should be destroyed in a dignified way, preferably by burning.