I just downloaded FAF on sunday, and I've only played ~20 games since then, and I've already seen enough instances of national stereotyping and racism to make me sick. I know these people should be punished, but why give them the tool to do so in the first place? Knowing what country a player is from is completely irrelevant. National origin is hardly indicative of ping, especially in Europe where countries are so tightly packed. And even in North American, a player from USA or Canada will be indistinguishable by ping. Not that it even matters, because ping is shown in the lobby, so if you want to kick high-pingers, you can just, you know... Look at the ping?
I can't see any need for national flags in FAF, nor can I see any downside to removing it them. On the other, I see vast benefits in removing national stereotyping in the community. The only thing I can see is that people might simply be curious, but if it that's important to you, just ask.