This answer to the question What is the purpose of putting a red flag on the dome of Hussain ibn Ali(as)'s shrine? states that if Arabs were at war with each other, during the Haraam months there would be a ceasefire (temporarily). To notify the opponent about it they would raise a red flag on the dome of their commander's marquee, and would resume thereafter.
Is that correct?
If so, how, when and why was this custom adopted?