From my conversations I've had with others, I think so. While Marandus is heavily involved in Pax Redoran, this mod only makes cosmetic changes to the fort and NPCs, not touching any dialogue. Though that being said, not knowing the full scope of Pax Redoran and how it changes marandus, I could be mistaken.
It should be fixed in the next release; basically if you run a patch like PfP, it will fix the dome position and thus the banner will be left floating (the dome is floating in vanilla and should have also been fixed in this mod).
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I did notice that the flag pole on top of the main building, was floating a bit above the top of the dome.
One question: What is it with the NPC in the tower carrying a "Rusty key" (key to armory) with her? I could not find any use for this key...
EDIT: I just checked and I didn't realise that the armoury door wasn't locked. I'll rectify this in the next version.