1) The car is still named "General Lee", so apparently there was still a horrible racist war slavery murderdeathkill army, they just didn't have flags.
b) I'll bet the Messerschmitt kit on the shelf above it had a decal sheet with both black and white swastikas, depending on which variant you planned to complete it as.
iii) Isn't it about time for our next round of chiding the Japanese for their historical revisionism regarding the whole Co-Prosperity Sphere era?