I think it's supposed to symbolise her role as head of the Commonwealth rather than as queen of the United Kingdom or of any particular realm. In the UK and non-Commonwealth countries the Royal Standard is used. I'm pretty sure Barraclough's Flags of the World gives chapter and verse on this, but it's a long time since I last saw a copy of that book. I seem to remember seeing it flying from the royal barge when the queen was on the Thames. It may also be used by the queen's swan hunters, but I can't be sure.
Personal flags are a quite recent creation.
For all other Commonwealth countries she would use her blue personal flag. In the case of Alderney which is a crown dependency she would almost certainly use the English variant of the Royal Standard. In fact the army don't use this flag despite what their publicity department want and actually use a red flag with the same emblem as on the ensign. The only pattern seems to be that the labels of royal children have three points, those of royal grandchildren have five points, and that of the Prince of Wales has no markings on its points. These include those who marry into the royal family, including the Duchesses of Kent and Gloucester and Princess Michael of Kent.