I've seen it in just about every country I have visited physically and in Geoguessr. Maybe not quite as prevalent as the US but I wouldn't actually say the difference is as big as people probably think.

What's funny is that beyond knowing you're in America, the flag doesn't help a lot with location guessing. USA is one of the tougher countries to pinpoint within in GeoGuesser. It's probably harder to distinguish Vermont from Ohio from Oregon (depending on the photo) than it is to tell Albania from Austria even with no flags or signs.