Continuity mistake: As Killick trims the wax on the candle, in the close-up his hand is wet. However, in the next wide shot as he says, "He's been at it again..." his hand is dry. (00:54:20)
Continuity mistake: After Killick sets down the platter of the 'Galapagos Islands', Jack says, "Gentlemen, I give you our destination." In the following close-up of the platter, the stack of china is to the left of the candelabra, yet, in the next shot, as Killick hands the spoon to Jack, the candelabra is farther back and the stack of china is towards the right. (00:59:00)
Continuity mistake: As Higgins studies the medical diagrams while sitting next to Stephen, when he turns the page he gasps and covers his mouth. The diagrams on the page in the close-up differ from the ones in the wide shot as Higgins still has his hand over is mouth. (01:27:50)
Continuity mistake: On Galapagos, as Stephen is being carried to the tent, after Jack utters the excuse of needing to stretch his legs, Mowett's position differs greatly in the two consecutive wide shots. (01:29:55)
Continuity mistake: In the tent before and during the removal of Stephen's bullet, the ropes at the top of the tent behind Jack differ in the close-ups and wide shots. (01:30:40)
Continuity mistake: When Stephen removes the bullet, the rope's knot on the pillow, to the right of Stephen's head, appears, disappears and reappears. (01:31:55)
Continuity mistake: As Higgins removes the piece of cloth from the bullet and compares it to the shirt, the blood on his hands and the way he holds the shirt differs in the close-up and wide shots. (01:32:50)
Continuity mistake: When Blakeney and Padeen run into Stephen's tent, Blakeney says, "So I've made a few notes, if you want to see them," and he hands Stephen the diary. The way Blakeney holds the diary, as he hands it to Stephen, differs in the shot facing him and the next one facing Stephen, note the clasp on the diary. (01:34:15)
Continuity mistake: As Stephen holds the diary, in the shot facing him he begins to flip the page with his right hand, yet, in the next close-up of the diary he flips the page with his left hand. The actual pages he flips and the way he holds the diary differs in this and following shots as well. (01:34:25)
Factual error: After Stephen Maturin comes back with a small portion of findings from the Galapagos Islands, he presents a stick insect to Captain Aubrey, but stick insects (Phasmids) don't exist in the Galapagos Islands. (01:41:20)
Revealing mistake: When the Surprise is disguised as a whaler, it burns smoke from the front end of the ship to make it look as though it is making whale oil. When it is chased by the French ship the smoke blows back over the ship. As they are sailing ships the wind is behind them which means the smoke should blow forward. (01:44:45)
Audio problem: After releasing the whaler prisoners aboard Acheron, Mr. Hogg shouts, "Now do your worst!" though his mouth clearly does not say that. (01:56:25)
Continuity mistake: After fighting aboard Acheron, when Jack sorts through some rubble with his sword and as he is stabbed, the items on the ground differ in consecutive shots. (01:57:10)
Continuity mistake: The blood stains on the front of Jack's shirt change drastically in the close-up, when he is stabbed, as compared to the previous and following shots. (01:57:15)
Continuity mistake: The position of the needle and thread lying on Peter's body differ in the wide shot and following close-up. (01:59:10)
Continuity mistake: In the close-up of the deceased, Mr. Allen lies right beside Peter and Blakeney's knees are visible above Peter's head, while he mourns over Peter. However, in the wide shot as Blakeney still stares at Peter, Peter and Mr. Allen are now much farther apart as Davies sits between the two. Peter and the hammock's position differ in his next close-up as well. (01:59:30)
Factual error: The version of the Lord's Prayer in the burial at sea scene is a more modern version, not from the Book of Common Prayer which would have been used at the time. (02:00:40)
Revealing mistake: During the scenes when Jack and Stephen are playing their instruments, it can be concluded that they are not genuinely playing. This is most noticeable in their last scene, when strumming. You will notice that they will be strumming when no music is audible. (02:07:35)
Continuity mistake: In the last shot we see the Surprise make a sharp 90 degrees turn to follow l'Acheron to Valparaiso. It seems that the wind changes 90 degrees in the same instant, because it is not necessary to trim the sails, and the pennant keeps flying in the same direction relative to the ship. (02:08:05)
Factual error: At the end of the film, Aubrey sends the de-masted prize Acheron to Valparaiso, Chile, for repairs. Valparaiso is 3,000 miles from the Galapagos Islands, and, in 1805, was a tiny village without appropriate port facilities to dock or repair anything as large as a frigate. Valparaiso did not become a major port until after Chilean Independence from Spain (1810). Guayaquil (in modern Ecuador) would have been a more appropriate choice, being about 750 miles from the Galapagos, and being a major port in 1805. The choice between the two ports was moot, anyway, since both municipalities were Spanish territory in 1805, and thus were allied with the French, and hostile to the British.
Chosen answer: The flag is a signal flag, and is probably meant to signal that the ship is a whaler or engaged in fishing operations. Such flags were part of an international code, which, with some modification, is still in use today. (The flag is similar to the modern-day "Foxtrot".)