I came across this article in Business Insider and the author is confused with the appearance of British Hong Kong flag.
The Meaning Behind British Hong Kong Flag
A group called HKAM (Hong Kong City-State Autonomy Movement) take the British Hong Kong flag and cut out the Union Jack on the upper left hand corner and call it 龍獅旗 (Dragon lion flag), as a symbol of real autonomous rule. They believe that if Hong Kong were under real autonomous rule, D&G incident — the invasion of rights to use public space and exploitation of native — would not happen because the HKSAR government would put local Hongkonger as their first priority.
HKAM’s literature 香港城邦論 (Hong Kong City-State Theory) , which has stirred up controversy, sold better than Steve Jobs biography in Joint Publishing, a big bookstore chain in Hong Kong.