I'm not Wad but I'll see if I can answer this. NPPL and Mil rules are pretty similar on this.
According to the NPPL rules, a player hanging the flag with an unobvious hit is considered an eliminated player and the flag is rehung at the original flag station. If the team has any live players, they can retrieve and rehang the flag, time permitting.
If a player hangs the flag with an obvious hit, then it could be considered playing on and a 1-for-1 penalty would be assessed. The flag is returned and can be retrieved by any live players on the team. The ref checking the player would have to make the call on whether or not the hit was obvious.
If the last player on the team is eliminated due to a penalty, the other team receives an automatic pull and hang.
NPPL Rules for this are:
4.14 Flag hang points are awarded when a player touches his original flag station with its opponents flag. Flag hangs will not be immediately awarded upon the touching flag station. The status of the flag carrying player will first be verified before a flag hang
is considered to be official. The time that the flag carrier touches the flag station with the flag will be recorded by the flag field judge, and should that player be determined to be live after being checked by the field flag judge, the hang will be announced and the game will have ended as of the time that said player broke the plane of the flag station. If the player is found to be marked after being checked, that play is eliminated and the flag is immediate re-hung in its original flag station.
12.72 If the flag carrier hanging the flag on a flag station as specified in Section 12.71 hereof is found to have a hit on him, the flag judge will radio his counterpart to re-hang the flag. The replacement flag will be immediately hung in the original flag station from which it came.