Upvote:2
What Sun Tzu is describing wrt chariots is the SOP in all armies around the world. E.g., Wehrmacht used a lot of captured T-34s:
note the cross on the turret.
Other armies (and navies!) did the same.
Our own flags should be substituted for those of the enemy
This is exactly what makes it legitimate: the captured equipment is marked as ours and used.
False flag is when you dress your soldiers in the enemy uniform, see, e.g., Operation Greif.