I think that you are correct. Somewhere at the back of my mind is the idea that "British Legion" could have overtones of "King's German Legion" (of much older date I know).
We had the British Section, New Zealand Expeditionary Force so could this be a badge for some overseas enlistment?
You'll see that the soldier copies the stance of the "Gentleman in Khaki" of Kipling's verse but wears the "soft cap".
I guess that we can't know EVERYTHING but it would be nice!
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