There was a rod sewn into the top of the flag to keep it from hanging limply off the pole. The wrinkles in the flag are from being folded on the outward trip.
The picture you used in your question is the famous photo of Buzz Aldrin saluting the flag. You can see part of his hand near his visor. Here is a higher resolution of the image:
http://www.hq.nasa.gov/office/pao/History/alsj/a11/AS11-40-5874.jpg
If you look carefully at the top of the flag you can see how the fabric of the flag wraps around the rod.
Now, take a look at the picture taken moments later. Aldrin is still standing on the same spot but he has lowered his hand and turned his torso slightly to his left:
https://www.flickr.com/photos/gsfc/4812876306
Note that the flag looks exactly the same in both pictures, something that would be impossible if it was flapping in the wind.