Doesn't really matter, actually. The Mexican flag shouldn't be flown in a US school unless it flies BELOW the US flag. I'd have removed it, and enjoyed my 3 days off. Of course, back when I was in school, nobody would have thought of doing something as offensive as putting a Mexican flag on display.
At the high school my son attended there were flags from various nations displayed in the wing where they taught history and civics. That did not seem to cause a problem.
The three day suspension is not a problem. Explaining that suspension when applying to college will be a problem.