I posted my findings on that topic in the Super Mario Speedrunning server a while back: https://discord.com/channels/599131748143464459/599134046404214784/999728789686857919

But if you would like me to give a brief explanation on why that happens, it has to do with the code that forces you on the right side of climbable object if you are less than 16 pixels from the left edge of the screen. The way the code works in the NES version is that the position of the left edge of the screen is subtracted from player X position, and if the resulting difference is less than 16 pixels, the player is forced to face left, which puts you on the right side of the climbable object. In the Japanese version of Super Mario All-Stars, this code was altered so the player is only forced to face left if the result of the difference is negative instead of less than 16, but the X position of the power up slot is used for the calculation instead of player X position due to some sort of error; because flagpoles are climbable objects like vines and the X position of the power up slot is not reset when the power up is unloaded, you can manipulate this value so the result of the difference is negative and the player is forced to face left as soon as the flagpole is grabbed. International versions of Super Mario All-Stars restore the code to be identical to the NES version (besides different RAM addresses), so the bug was fixed.

https://discord.com/channels/599131748143464459/599134046404214784/999732499687162008 but with this, is it possible to do flag despawn with only 4 sprite slots filled and not 5?

Unfortunately not, that patch makes flag despawn impossible. The way the star flag is spawned, the game checks for slot 0 through 4 to be empty, and if none are, it will force itself into slot 5. Because the patch moves the flagpole flag to slot 4, the slot 5 override cannot affect the flagpole flag.

Yeah, but, if slots 0-3 are filled, then would the (hacked) game make the star flag spawn in slot 4?

If only slots 0-3 were filled, the star flag would spawn in slot 4 (which is consistent with the original NES version). But the flagpole flag is always going to get loaded before the star flag, and when the flagpole flag spawns in slot 4, as it does in that patch I shared, slot 4 is considered occupied so the star flag cannot spawn there, and if slots 0-3 are filled too, it has to spawn in slot 5. Hopefully that makes sense?

Ohhhhh ok. (It does. :])