Simply practicing. I had a pony once who was terrified of umbrella's so I'd put a couple of umbrellas in his field (on a non windy day obviously), then would attach to the top of a jump wing (so it was open and above him) and dot around his paddock while he was grazing. Would carry one and open it up while lungeing then slowly get closer with it until I could lead him around while holding it over his head. Just takes time and consistency, literally do something with a flag / rossette every single day even if its just hang it a bit close to him or hold one while your poo picking etc. With regard rossettes though, I never let people attach them to the bridle during the prize giving, I simply ask for it and immediately wrap it up and put it in my pocket if the horse isnt a big fan of them.
My previous got bopped on the nose by a steward with a clipboard and then became a bit funny about rosettes. In showing the class isn’t finished until after the presentation so i used to have a rosette in my pocket and hand it to me when I was schooling and make a fuss of him.
We have bunting and flags at the stables, any equipment we have issues with in games I work on without the child, just get the pony used to being near it and reward with food. Also works for the child
The thing is that flags + rosettes is something horses often only encounters at competitions, when they're already to some degree on their toes due to competition excitement, and that's when when we decide to add these from big to small flapping things of doom decorations.
Start with making, or buying some things which are or looks like a flag + rosettes, or gather together some that you already owns, which can be used for the training. Try to begin with adding a few as decorations around the pony's daily life. Be inventive. What happens if you, and your daughter starts wearing a rosette on your jackets around the stable?
If the pony is really food oriented, you could perhaps e.g. hang up some rosettes so that they're within vision of the pony's feed bucket/hay bar/manger. If that works, once the pony gets used to eating with them within vision range, move them a bit closer to the feed bucket/hay bar/manger. And later a bit closer...
If the pony thinks the rosettes are more scary than the ordinary food is interesting, what about a bucket with yummy horse treats + rosettes nearby? Carrots? Apples?
If he's not scared at all by rosettes simply hanging on the wall nearby his food, what if someone stands and holds the rosette, a bit like a person going towards horse + rider with a rosette during a prize ceremony? What if two persons hands each other rosettes nearby the pony?
He might never get to the point where he likes to have a rosette dangling from his bridle nearby his eyes, but make him so used to seeing them in everyday life that he at least can't be bothered to bolt because of them.
If there's any chance that your daughter is worried about him bolting during desensitising training in the manége or wherever else she schools him, which unconsciously could send the pony a signal about that there is something to be tense about, consider to instead of letting her ride the pony, to have someone else (calm) lead or lunge him.
Tape your flag/flag substitute to an obstacle wing or the end of a pole, place the obstacle wing or lean the pole against the wall/fence in one end of the manége/school, and train him to be calm, and work in the other end. When he can do that, decrease the distance to the flag a little bit, and later another little bit...
Maybe some days place the obstacle wing/pole with taped on flag in his field...