According to "A Sketch of the 12th Alabama Infantry" by Robert E. Park, the battle-flag of the 12th Alabama Infantry was held in Mobile, Alabama, after the war.

Unfortunately, the writer (Robert Park), was severely wounded at the 3rd Battle of Winchester on September 19, 1864, so he was not present at the Battle of Fisher Hill. Perhaps the regimental flag was lost on September 22, 1864, but as part of Battle's Brigade, which came out "intact", I wonder how likely that was. The Brigade of five regiments had far fewer than 1000 men at Fisher Hill and fought more as a single unit. General Battle oversaw the defensive line. I can offer the following:

September 22, 1864, began as a quiet day in the Confederate lines, especially for the men of Battle’s Brigade on the extreme left flank. Most of the skirmishing had been taking place far to the right and although it had intensified as the afternoon wore on, there was little of note on the left until about three o’clock. At that time, General Grimes summoned General Ramseur to point out that there had been some Federal activity to the left of their line and implore him to strengthen the left, as there was only a weak brigade of dismounted Confederate cavalry under General Lomax, beyond them. Initially, General Ramseur discounted the concerns of General Grimes as an optical illusion, but after peering through his binoculars, he finally saw Crook’s sixteen infantry regiments bearing down on the left. Despite all he saw, General Ramseur declined to bolster the left until he first discussed it with General Early. A Confederate private observed in his diary that he and his companions could see Crook’s men “moving in heavy columns of infantry to their right all day. We can see them plainly climbing up the side of North Mountain.” At about 4:00 – 4:30 P.M., as the sun began to set behind Little North Mountain, Union General Crook’s two divisions, about 5500 strong, struck the Confederate left. The cavalry pickets put up no resistance and took to their heels, telling their comrades in Ramseur’s Division as they rushed by, that they had been flanked. In fact, a cavalryman continued down the line reporting to each command that they had been flanked on the left. This started a general panic in the line.

Ramseur reacted swiftly to the assault. He shifted his closest brigade, Cullen Battle’s Alabamians, from their earthworks to a “prominent ridge” paralleling the Union advance. By the time Crook’s men reached Battle’s Brigade, the Union VI Corps on the Rebel front had connected with Crook’s left and the whole Union Army pressed forward from the left and front. The Alabamians knelt behind some stone walls and unleashed a volley. At the end of Battle’s line at the main works, the gunners of Major Thomas J. Kirkpatrick’s Amherst Battery hand wheeled their cannons to the left to support Battle’s men. As the attackers rushed forward, the Confederate Battery fired sheets of double canister into them and General Battle, wielding a cedar fence stake, urged his men to stand firm and shouted, “Close up! On your life!” General Battle continued to walk behind his roaring line, brandishing his cedar stick, clubbing anyone within reach who turned and ran. His hardened fighters could only hope to buy time for the other artillerymen to get out their pieces and for General Ramseur to redeploy his other brigades. General Ramseur sent General Cox’s Brigade to Battle’s support, but the rest of the Confederate line was giving way and in the confusion, Cox got off track and the Alabamian’s were left to fend for themselves.

The staunch resistance by the regiments of Battle’s Brigade and Kirkpatrick’s Artillery was later noted by Crook in his report. “On a prominent ridge about one mile from the base of the mountain where one of their main batteries was posted, the enemy made his most stubborn stand.” The momentum of the Federals temporarily slowed, particularly Thoburn’s Division which moved along the Rebel works. The Butternuts, Crook wrote, “were making it hot for us.” Some of the Northerners turned back towards the wooded mountain only to be met by their commander who began pelting them with rocks. Given the choice between a furious Crook and his armful of rocks or the Rebels, most of the skulkers picked the graycoats. Confederate Colonel Thomas Nelson, the battalion artillery commander, wheeled a battery into line behind the Alabamians. This added metal still couldn’t stem the flood of Crook’s surging men. Thoburn’s soldiers had closed to within sixty yards, and Hayes’ jumbled ranks were overlapping Battle’s left flank. It soon became apparent to the Confederate artillerists that the Federal troops could not be held off indefinitely, so as the battle raged, concern among the gunners grew over how they were going to prevent their guns from falling into Union hands. The horses were brought up “very quickly”, and the gunners began to hitch up the teams to safely withdraw the guns.

The men continued to fight on. Finally, when the pressure of Crook’s attack became too much to endure, the Artilleryman raised his cap and said, “I thank you, gentlemen; it is useless to stay longer.” As Kirkpatrick’s artillery fire stopped so that the guns could be removed from the field, the artillerists stood in awe at the mettle of Battle’s command, which fought desperately to buy precious moments for the artillery’s safe evacuation. One of Kirkpatrick’s artillerists noted that in the effort to evacuate the artillery, “Battle’s Brigade….behaved splendidly.” Soon the weight of the Union attack became too much to endure. Finally, the brigade had to relinquish its’ hold on the stone walls to the Federals, who were “gallantly charging with irresistible impetuosity.” With that the guns and Battle’s Brigade withdrew from the field.

There is no mention of any part of Battle's line being overrun in this account, so again, I feel it unlikely that the flag captured was from an Alabama regiment.

I would be very interested to see an account from the Union perspective and perhaps learn more about the flag capture.