The people despise the officers. The narrator recounts his experience with them as he and three other young officers would walk through town:
We walked the short way through the communist quarter because we were four together. The people hated us because we were officers, and from a wine-shop some one called out, "A basso gli ufficiali!" as we passed.
Roughly translated, the Italian phrase means "down with the military officers." The fact that the narrator is hated by these people emphasizes his isolation in this foreign country
I want to clarify your question. The men in the story are walking through a part of Milan during World War I. Milan and Italy were not Communist countries, but the soldiers are walking through a part of the town the is communist. They are despised for their medals and this helps intensify the feeling of isolation in the story.