According to AI search they should wave... Kind of janky that they took a step back from TWs that came before and after. Is there a setting that I have wrong or a mod I'm missing for that gets rid of the stiff cardboard unit flags?

Total War: Attila's 1212 AD mod features flag physics that can affect how flags behave during battles, but specific details on the mechanics may vary. For more precise information, you might want to check community discussions or guides related to the mod.
Steam Community

"Flag Physics in Total War: ATTILA 1212 AD Mod
Overview of Flag Mechanics
In the 1212 AD mod for Total War: ATTILA, flags play a significant role in enhancing the visual experience of battles. The flags are typically held by individual soldiers in each unit, contributing to the game's immersive atmosphere.

Types of Flags
Unit Flags: These are small flags held by soldiers, representing their unit's identity.
Banners: Larger flags that float above units, indicating the unit's status and morale.
Physics and Animation
The flags in the game are designed with physics that allow them to react to in-game movements and environmental factors. This includes:

Waving Motion: Flags wave realistically based on the unit's movement and the wind.
Collision Detection: Flags can interact with other objects and units, adding to the realism during battles.
Customization Options
Players may seek to modify or remove flags for various reasons, such as improving performance or personal preference. However, specific instructions for altering flag settings are often discussed in community forums.

Common Issues
Some players have reported issues with flags not displaying correctly or causing crashes. A common solution is to ensure the game language is set to English, as certain mods may only function properly under this setting.

For further customization or troubleshooting, players are encouraged to consult community discussions for detailed guidance."