It's the international diver down flag, meant to stay x-meters/yards away from the flag due to divers or other RAM activities, speed trials, subs, etc and also to indicate a no wake zone within x-distance. Depends on the territory it's being used in, but usually 100-150 feet for no travel.
Only really carries meaning in international waters and on shore dives etc, you have to have the US Dive Flag. It also indicates the vessel is RAM.
The Diverdown flag is also required to be shown either on the boat or in the water near the dive site, has a no wake zone and a no travel zone that also varies by state... Again usually 100-150 feet of no travel
Just make sure you have the red flag flying with it. I think 50feet is the no travel in NJ, 100ft in New York. In NY it's either or in the state waters from a boat. Rules here in NC are VERY strict and quite clear, not so much where you are. ALPHA flags aren't a substitution for the red flag in state waters, so if you fly the ALPHA flag you have to fly the other one simultaneously. Best of luck, and safe diving