My view on this is actually super simple.
The FA decide the rules.
That's it really, it's their competition and they get to decide what you can and can't do if you participate in it. If they say no yellow ribbon then no yellow ribbon. Pep can wear a yellow ribbon for 22 and a half hours a day if he really feels like he has to (and I admire and encourage him to do so). But during this time, he is paid and expected to be managing a Premier League team under the jurisdiction and rules of the FA.
People can argue that the rule is stupid, and I agree somewhat, but it IS a rule and he should respect that. Why stand in his technical area? Why not play 15 players in a match? Why not manage bollock naked? Why respect SOME rules but not other rules?
This isn't a freedom of speech issue to me because the FA is not the Government. They run an invitational league that is owned by the Premier League and can exclude people for any, many, or no reason. If they wanted to dock City 50 points then they could an nobody could really stop them if it was within the rules.
If you want to get rules changed then you work within the system to try and change things. That's how the whole of civilisation works, generally.