This does not appear to be a photoshop job. It’s cropped up before and neither Mitch McConnell not the Sons of Confederate Veterans have had much to say about it.
This is only awkward if you believe in anything but power and maintaining your position in the establishment. If that’s what you believe in, then you’ll drape yourself in any flag that gives you a few votes. Although, to be fair, he may believe in what that flag stands for.
I can’t make out details of the plaque but it looks like an erection, and a bunch of confederate soldiers marching nobly toward defeat.
By the way, Mitch: hatred and bigotry are American values. Other than militarism, they are the US’ signature in history. Let’s change that, huh?