The background story of this Koan
Huineng, the sixth patriarch, who decides the flag-questions two monks are discussing seems to be superior to them.
But his answer "Your mind is moving" is still caught in the question about a moving flag.
The story is a subtle criticism of the great master. The founder, the patriarch is obviously wrong!
That's proved in another story, where not only two but 17 monks discussed the flag-Koan.
A nun heard them talking, laughed and sent the boys home for meditation. This made the 17 discussing guys enlightened at once. Not bad this nun!
In his comment Mumon tries to rescue the famous sixth patriarchs' image. Huineng wanted help those two monks, therefore he gave this insufficient answer, Mumon writes. Obviously nonsense. The old Chinese Master weren't that nice at all.
But Mumon did it, for Huineng was the most important Master in Chinese Zen-history. He made the southern school dominant in Zen and wrote the platform sutra, a founding text. Such a "Giant" couldn't be wrong, what story ever were told about him.
The original Chinese Goang
Because the wind tossed the temple flag, there were two monks debating what was correct.
One said, “The flag moves.” One said, “The wind moves.” Going back and forth repeatedly, they did not agree in principle.
The Ancestor said, "The wind is not moving, the flag is not moving. Virtuous ones, the heart-mind moves."
At that the two monks were startled.
Traditional Commentaries and .... Poems (Gata)
The sixth patriarch said: "The wind is not moving, the flag is not moving. Mind is moving." What did he mean?
If you understand this intimately, you will see the two monks there trying to buy iron and gaining gold.
The sixth patriarch could not bear to see those two dull heads, so he made such a bargain.
The wind is not moving; the flag is not moving; the heart-mind is not moving. In what place do you see the Founder?
If within you are able to see intimately, in that place you know the two monks bought iron and obtained gold.
The Founder did not restrain his refined forbearance and in the one open space he divulged and stirred.