The Atlanta Intelligencer report was, according to somebody who knows way more about this than I do, written under the mistaken impression the flag was going to be the new national flag replacing the First National. The article is not about a battle flag at all.
The article in the 1 Dec 1861 issue of the Atlanta Intelligencer Newspaper, included a sketch of the Confederate battle flag and underneath it was written: "C. S. A. Battle Flag." Below that was the article itself. Beauregard was very specific in why he and Senator William Porcher Miles saw the need for and were designing a "new" Confederate battle flag because of confusion created between the Confederate First National Flag and the United States Flag on the field of battle. Beauregard was not suggesting that the Confederate battle flag would replace the First National Flag as the Confederate Government Flag, only on the field of battle with the understanding that the First National Flag would still exist and be used to represent the Confederate States of America. So the Atlanta Intelligencer got it right in the article.