What is the name of a flag that has cut outs that project a pattern on the subject or background?

The correct answer is a gobo. A gobo is a specifically designed flag that incorporates cutouts, which when placed in front of a light source will project a pattern, design, or texture onto a surface. This makes gobos a useful tool in various scenarios, including theater lighting, photography, and film production, as they can add visual interest to a scene or highlight specific areas of a set or backdrop.

In contrast, the other choices do not serve the function of projecting patterns. A cookie, while it can similar to a gobo in appearance, typically refers to an object used to create shadows or break up light, but it is not specifically designed to project patterns like a gobo. A scrim is a type of fabric used to soften or diffuse light without pattern projection, and a diffuser serves to spread light evenly, minimizing harsh shadows, rather than projecting specific designs. Thus, the distinguishing characteristic of a gobo being its functionality to create projected patterns solidifies it as the correct answer.