Thank you everyone so much for all your input! I did not expect anyone to reply at all to this thread so thank you for making my evening.

While it does seem quite silly to put into use a practice that as Ozme52 said, "requires a cheat sheet to decipher," it is still something interesting to me. Probably because due to my living in a small southern town, I could be walking the one block main street at a street fest and if I saw a handkerchief in either pocket it would be quite fun to imagine that just maybe they were putting the 'handkerchief code into use.
Even if they were not I would probably still laugh my ass off.
I assume it is quite easier for you to simply ask (ID, and leah06), so I am in agreement with you there. And Ozme52, from your post it seems almost as though you have encountered it before? If that is obvious, and I am simply restating it in the form of a stupid question, I apologize. Did you by chance once have a friend who thought this was the awesomest thing ever since white-out?
Did anyone?