Hi there annie,
Have only heard of a red ribbon tied onto a horses tail to beware of a kick. Folk who use this yellow sign know the dog is their own responsibility, most attend clubs so there isn't a danger with the ribbon being abused because of the ground rules and posters are put up as a reminder.
Oh the muzzle comment, that just shows you the persons inexperience doesn't it! Anybody owning a dog that has special needs would never say this. I'm sorry about your older boy losing an eye, great to hear he is getting better.
~Pat