I won't say misleading... However it does take quite some readings to get to the part - this listing for one bunting only. So maybe you want to open the descriptions with - one flag only.
And personally I don't like to read a block of big paragraph - lazy me :-). So when I don't read all, I miss the important point - one flag only. That must be what happened with that buyer. We don't read, do we!
Did you find the refund button on PayPal yet? Right on the page of the buyer's transaction with blue, click-able link. Then, you also need to cancel transaction on Etsy to get your closing fee back.
Your bunting is romantic... with scallops and all