Of all the shows I've had to watch, "If Her Flag Breaks" was the hardest to finish. The characters were stale, the plot was a mess, and each episode was a slog to get through. The only saving grace was that the ending was stupid enough to be entertaining.
But that's not what we're here to talk about, is it? What matters here is how the show handled Megumu.
I'll be honest, he was as bad as everything else. It felt like someone had decided to make a PG version of Hideyoshi. He wasn't used for fanservice in quite the same way, and at least the main character saw him as a guy. The only jokes they told with Megumu were about how unmanly he was or how the girls never remembered his gender.
In terms of josou, he was bad because he was either forced to cross dress or there was no reason at all. The school modified his uniform at the request of his sisters "because it was cuter." At one point, his sisters stole all his clothes and replaced them with women's clothes. At another point, he was mistaken for the actress in a parade and forced into a wedding dress. He cried when his friends saw him.
There's one time I can recall him choosing to wear a dress, and it was at a dance toward the end of the series. That was never explained. Of course, I'd have no problem with Megumu wanting to wear a dress now and then, but I'd prefer if the show was consistent.
It's pretty obvious that Megumu was written to be a joke. He isn't the worst I've seen (as I doubt many will actually beat Hideyoshi), but he's nowhere near good.