Ryan, hi got your message but just been damn busy(i hate that!!)
To my knowledge its not for a branch of service just another mark for one of walthers many factories.I dont have the reference book on flare pistols but I'm sure it would be referenced in it. Price seems all over the place on flare pistols. I purchased 2 for 200 bucks. i purchased 1 for 275 bucks. The one like your was in a swap deal so really I paid nothing for it. If I seen one at a show I wanted or didnt have and it was in the 200-350 range I'd buy it. I see early walthers about all but gone( with the nice finish, pre war type) these war time ones like all this stuff is eaten up quickly. I had a chance to buy a luft double barrel for 400$ about 5 years ago. I passed but have a big regret about it.
Hope you a doin' ok?
Bret