Brendan John Jones, 45, was charged with public nuisance after the swastika was displayed over the synagogue in the heart of Brisbane's CBD.
He failed appear at the Brisbane Arrests Court on Tuesday, emailing the court asking for his appearance to be excused.
However, police argued the allegations were "quite serious" and should not be dealt with in his absence, with a warrant issued for his arrest if he failed to appear on December 14.
Police will allege Jones claimed he placed the flag out of the window as a joke and did not realise it would cause offence.
Brisbane Lord Mayor Adrian Schrinner called for the propaganda symbol to be banned in Queensland.
"This is sickening. For someone to fly this symbol of hatred and genocide right above the Brisbane Synagogue on Margaret St is pure evil," Cr Schrinner wrote on social media, posting images of the incident.
"It's time for this vile flag to be banned. Queensland needs to get serious about cracking down on these displays of racial hatred."
Cr Schrinner was also critical of the charge placed against Jones.
"Under the current inadequate laws ... nothing more than a low-level public nuisance - not good enough."
The incident was also condemned by leaders within Queensland's Jewish community.
"That flag and that symbol, the Nazi swastika symbol, represents one of the most evil moments in human history," Queensland Jewish Board of Deputies vice-president Jason Steinberg said.
"For that to appear in 2021 in Brisbane over a synagogue is just atrocious."
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