The whole thing about what a Flag can and cannot be done unto, and what it can and cannot be used for, is tied to the concept of "desecration," and the "official rules" about that include that the "intent to desecrate" has to be provable.
Draping the casket of a soldier, or making a quilt to honor that person, or to use to help get that person to a reverenced burial, is no desecration nor intent of desecration.