Do not know if they still do it, but about 12 years ago the rail line into Newquay still used a similar system, but with a hoop type arrangement rather than a flag.
Still happens today. The railway between Nairn and Forres (Moary Firth) is single line token working. When the train stops at Nairn the driver collects a a token (like a key) in a leather wallet on a metal hoop about 18" circ. This is his 'permission' to continue on the track. It's handed off to the signalman at Forres, and vice versa.
I must get out more.
