The displaying of the American flag is technically banned at Arlington National Cemetery.
A law meant to block anti-military protests and picketing during Arlington burials was passed in 2006, and an unintended consequence of that act has made it illegal to display anything at the cemetery… even the American flag. Doing so could result in a fine or up to one year in prison.
There are special circumstances, of course, including flag displays that are “part of a funeral, memorial service, or ceremony,” which explains why it’s okay for soldiers to place those tiny flags next to each headstone and marker for Memorial Day and other national holidays and ceremonies.
In all other cases, U.S. code forbids the display of “any placard, banner, flag, or similar device” at the cemetery unless pre-approved by officials.