The Deputy Secretary of State originally implied that was why, but now they’re steering into it, according to the NYT:

Eventually, the State Department’s top public affairs official, Dylan Johnson, chimed in with the department’s response to the flap.

“In no other foreign ministry or state department in the world do they display the flags of hundreds of other countries in place of their own,” he wrote on social media. “This is the United States Department of State — not the World Department of State.”