According to the Chinese Wikipedia, which cites page 18 of the Visual Guide, Umi didn't raise the sixth O flag because she only had one set of flags. Normally, substitutes can be used to repeat the same signal flag one or more times in case only one set of flags is carried on board:
The Repeater/Substitute flags allow any combination of five letters to be hoisted with only a single set of flags: hence, 2R means a duplicate of whatever was signified by the second flag.
However, as customary of the International Code of Signals,
The flags of the International Code of Signals, although they represent the alphabet, aren't normally used for English-language text. Instead, they are used either to give the call letters of a ship, which are allocated internationally by subdividing the alphabet in much the same way as is used for radio stations, and which are four or five letters long, or for indicating codewords in the International Code of Signals.
the intended message (HOKUTO) is one letter too long, so the last O was omitted.