If the flag was inadvertent, or the official determines that a foul should not have been called, the procedure is to pick up the flag and wave it back and forth, to indicate that the foul is "waved off."
There is a penalty on the play.
yellow
penalty
It usually is called a penalty and is showed by a yellow flag.
A yellow flag means you have injured a player,foul,just like football.
To indicate that he has seen a penalty committed by one or more of the players.
most football officials tuck our flag in our waistband. being right handed it is tuck just to the right in front on my knickers
Yellow flag
It indicates that a foul has been committed.
In the game of soccer, a buzzer flag is a flag attached to a buzzer worn by the assistant referee, which causes a receiver to buzz, warning the referee of the flag's use.
If the referee deems it to be delaying the restart of play or unsporting behavior.
Why would they challenge a call if no call was made? Once the referee makes a call, the coach can then throw the challenge flag (if it is challengeable...not all calls are).