Please disregard above comment. I have updated the ticket description with the correct information.
When I break the banner and hold it in my inventory, the item icon appears correct.
Correction regarding the item texture: In the description, I stated that the item icon appeared correct in the inventory. This was incorrect. Upon further inspection, the item icon itself also displays the missing texture (purple/black checkerboard), just like the placed block.
Oh, I’m very sorry. Thanks!