The developer says that it was unaware that there were any similarities in the design and, once it was brought to its attention, Bungie removed the armour from the game.
As for the exact meaning behind the Kekistan flag, it has a long and odd history of perversion to mean what it does today.
Though the flag has always been used to symbolize channer culture's offensive brand of humor, over the past two years or so it's been linked to the alt-right, a political group mostly consisting of white nationalists.
The pair of gauntlets "shares elements with a hate symbol" was Bungie's exact wording.The markings were too reminiscent of the Kekisten flag, a symbol of an alt-right group.
Bungie CEO, Pete Parsons, also addressed the decision to remove the item via twitter, saying "Our company values place the highest emphasis on inclusion of all people and respect for all who work with us or play our games". Thus, you have the alt-right Kek. The flag was made to represent a fictional country known as "Kekistan" and was intentionally created to resemble the Nazi Germany flag. "We renounce hate in all forms".
They later confirmed that the image had been removed from the shared game world and that all relating imagery, including in-game icons, are set to be removed in a "HotFix" that is scheduled for next week.