The book "A Band Of Brothers: Photographic Epilogue To Marylanders In The Confederacy" by Daniel D. Hartzler depicts all existing Confederate Maryland unit flags - mostly from the state collection in Annapolis.
Therein are 4 flags that need mentioning:
Co. B, 21st Virginia Infantry (an all Maryland men unit) which is a "state" flag with the 1854 coat of arms on the white field. While the shield can be made out the flag is so faded that the breakdown of the parts of the shield cannot be made out.
2nd Maryland Infantry "state" flag. This is a blue flag with the state coat of arms on it. This time the two different parts of the shield can be discerned - and the black and gold parts are included. It too is listed as being the 1854 coat of arms in the text.
1st Maryland Cavalry. This is a Confederate First National but has the Maryland state coat of arms in the canton surrounded by the stars. It too is the 1854 seal with the black and gold part.
Co. E, "Winder Cavalry, 1st Maryland Cavalry. As above, it also has the 1854 state seal - that features the black and gold and the bottony cross.
So - though it looks like the Confederates used the red and white parts for a lot of their symbolism, it also appears that they were not too upset with the 1854 state coat of arms - since it shows up on three, and possibly four, of their flags!