Frills on U.S. Flags Art Imitating Life?

Noticed a rather odd thing last time I was in the state Court House. What I saw was a U.S. flag being displayed with three sides marked with Gold frills. Certainly we do not fly U.S. flags with "Gold Frills" so why do we have them in our public buildings, and most often in places where authoritative persons hold office?

My curiosity got the better of me and I asked a few people who worked for government and the most common answer I got was that they were prettier than ordinary flags and looked nicer with the frill. Some said they had no idea why, but the general consensus was that they are just more artistically pretty and nicer to look at and there is really nothing more to it than that.

The answer did not satisfy me, so I asked some friends of mine in the military. They, of course, know all about flags as they are taught their uses in every ceremony. There are "Storm" flags, "Parade" flags, "Garrison" Flags. Flags that are used for covering a the tomb of a fallen soldier etc..

This made me feel like I was on the right track and the answer came back to me that the flag with a "Frill" around it is known to the military as an "Admiral" flag or one used by military service persons at sea on a U.S. Ship or during war.

Here is the actual description from a military manual:

"Pursuant to U.S.C. Chapter 1, 2, and 3; Executive Order No. 10834, August 21, 1959, 24 F.R. 6865, a military flag is a flag that resembles the regular flag of the United States, except that it has a YELLOW FRINGE, bordered on three sides. The President of the United states designates this deviation from the regular flag, by executive order, and in his capacity as COMMANDER-IN-CHIEF of the Armed forces."

With this mentioned I must ask everyone in public office buildings. Are we part of a militarized society? Or is your "frilled" flag just pretty art?