I think we can delve a little deeper than this. I know this issue has receded, but since I still keep my wallpaper as this Dante, the flag had eventually provoked some thought. I'm writing this from my own interpretative point of view, so level with me. The British flag holds so many symbols and allusions. If anyone reading this has looked into the names of the characters, particularly those of Dante and Vergil, a connection can be made between Dante Alighieri and Vergil Maro (the Roman epic poets). Both are famous for their literary contributions. Dante wrote the Divine Comedy(About Dante venturing into the underworld to rescue Beatrice), while Virgil wrote the Aeneid (Particularly in Book6, Aeneas is guided into the underworld to get advice from his father). Under these pretences, I can safely say that the names of Dante and Virgil pay tribute to the forefathers of the Epic genre in literature. Britain, as we all know, has a rich history in literature as well. So we have this connection, but what does it mean??
My theory is this: the game pays tribute to the world's legendary empires, being Roman and Britain, who have both nearly controlled the entire world at one point (think Ceasar's reign and colonialism). Considering the geographic, Romans (Europe) and Britain (America), we have the world represented in the game. It's no wonder then, that Mundus' name in latin means The World. I'll leave this open for other interpretations.
Maybe I put too much thought into this, but having a background in English Literature, I could not help but draw these connections, and make sense of them. If anyone should read this, what do you think?