Here's what I've been able to find out.
From 1900 Prussian generals had worn ornate collar patches embroidered
in a style called Alt-Larisch, which had first been worn in the 18th
century by the 26th (älterer von Larisch) Infantry Regiment; the
Reichsheer and the Wehrmacht continued the tradition. These devices,
sometimes called Arabesken (arabesques), were embroidered in gold
bullion or golden synthetic Celleon on Hochrot (scarlet) backing.
I have seen it described as an ornamental gold tassel. The term
is a reference to the intricate designs often found in Moorish
architecture and design.