I think really the key feature here is that these "cloth" pennants feature a
woven fabric, as seen in this close-up photo; whereas the traditional pennant features a
felted fabric.
Felted fabrics aren't woven; rather, they're made by taking millions of wool or polyester fibers, rolling them flat under great pressure, then curing the flattened result with a heat or water treatment to bind everything in place.
That's why, if you examine an old felt pennant up close, its composition would look random--nothing like these woven ones.
That's also why, when you cut woven fabric, the threads along the leading edge quickly loosen (because the interlocking of the threads has been broken, which is what binds that type of material together), leading to frayed edges.
That doesn't happen with felted fabric.