I am not real familiar with working with fondant so have a question, which may sound "stupid" to you more experienced cakers.
I want to make a billowing flag on the top of a cake - laying across the cake and going down one side. Is the fondant going to harden up and become brittle or does it stay pliable and soft?
It depends on what you want it to do and what kind of fondant you use. Most fondants will eventually get hard and stiff - sort of.
Do you want the flag stiff and how stiff do you want it?
OK - you want to keep it pliable until you get it on the cake. If you want to make it ahead of time, keep it covered with plastic wrap so it will stay soft. Once you put it on the cake it's going to stiffen up a little, depending on how long before it's cut.
If you want it to stay soft, use Duff's fondant - - it doesn't ever get really hard.