Phineas decides to wear the pink shirt as "an emblem". He says vaguely that he heard that the Allies "bombed Central Europe for the first time the other day", so he feels he must "do something to celebrate". Since the boys do not have a flag they can "float...proudly out the window", he decides to wear the pink shirt as his own personal statement of celebration instead.
Phineas's flouting of the pink shirt and his outlandish explanation for doing so symbolizes two things. First of all, it represents his amazing propensity for thinking and acting completely outrageously, and getting away with it. Gene notes with amazement that "no one else in the school could have...(worn the shirt) without some risk of having it torn from his back". Not only does Finny manage to escape the censure of his peers for his attire, but he also avoids punishment at the hands of Mr. Patch-Withers, who, uncharacteristically, can only laugh upon listening to his student's convoluted reasoning. The pink shirt also symbolizes the "separate peace" enjoyed by the students in the summer session at Devon; there is a war going on, but they are far removed from it. Their perception of the war at this time, like the incongruous pink shirt, is wildly detached from reality (Chapter 2).
When Phineas wears his pink shirt to tea with the headmaster and his wife, he seems out of place at first. He had recently read that Europe had been bombed and was wearing it as an emblem to the news of WWII. He feels that in a way he is celebrating the bombing in Europe in a non-comformist way. Phineas is the only one that would have been able to pull off the reasoning for wearing a pink shirt to tea. Had anyone else tried to wear a pink shirt and claim that it is an outward expression of the war, they would have been ridiculed and forced to change in more appropriate clothing. This, along with other examples in the novel, represent how Phineas is able to get away with different acts of behavior that others would not be able to.