This is taken from our page of instructions with some additional explanation:
The FLAG card is a card with a twist. It can be utilized as an IDENTICAL card or a WILD card. *The FLAG card is the ONLY card that can be changed back and forth (from a Red Book to a Black Book) within the SAME TABLE GROUP at any time PRIOR to closing the book. (This means a player has an option to call the book a black or a red book upon closing the book. A PLAYER CANNOT PICK UP THE FLAG CARD AND PLAY IT IN A DIFFERENT GROUP OF CARDS.) Our game adheres to the old adage that “a card laid is a card played”.
The option of making it a red (natural) book has to do with this; a player plays the FLAG card with 2 cards to help make a meld. As the play continues the player ends up with 4 more of the natural cards that were played with the FLAG card. At that point all 6 natural cards are played with the FLAG which makes the book RED or NATURAL.
The option of making the book a black book is usually when a player needs a black book to go out and has no hope of getting more of the natural card but has wild cards the player can play 2 more wild cards in the group, call the FLAG card a wild card along with 2 other wild cards and 4 natural cards and fold it up as a black book.