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The order instructs the attorney general to "vigorously prosecute" people who violate flag desecration laws and pursue litigation to clarify the scope of the First Amendment regarding the issue, the fact sheet said.
As a little backdrop...
There were a few rulings in the late 80s that ruled that federal flag protection laws were no-go. However, the EO "directs the attorney general to refer flag desecration cases to state or local authorities."
Currently, around 40 states still have flag desecration laws on the books (including a mixture of red and blue states).
For the various states that still have laws on their books, some only pertain to the US flag, others extend the protections to the Confederate flag, a few extend protections to their State flag and various "coats of arms" (didn't realize that was still a thing over here on the other side of the Atlantic), and some local ordinances extend protections to the city flag.
I can see this going one of two ways
1) a court battle
2) states and localities take a page out of Newsom's recent playbook, and fight fire with fire. (like what Newsom is doing with the gerrymandering...basically neutering overreach by cancelling it out)
A few blue cities a few years back made the Pride flag their official city flag, thereby adding protections to it, and exempting it from the laws/bans of their red state.
What that would look like in this case, is blue cities and blue states make their official flag something that symbolizes some sort of ideology or advocacy that republicans don't like (something like the pride flag or a planned parenthood logo, a picture Dylan Mulvaney...take your pick), and if a conservative were to deface or vandalize one, they would be prosecuted harshly by Trump's own EO.