That's what I just read about it on Wikipedia. Goering ordered them to remove their Ace of Spades insignia and paint the red cowl band instead as a mark of shame.
IF you believe Wiki, after the commander (Hans-Jurgen von Cramon-Taubadel) was replaced Goering permitted them to remove the bands and reinstate their original insignia. However in protest of Goering's actions, the ENTIRE group removed the swastikas from the tails of their aircraft.
I'm not finding much information on Cramon-Taubadel's wife, other than her name (Viola von Kaufmann-Asse) and that she survive the war (d.1997). Whether she was protected by her marriage to a high-ranking officer, or if she left Germany and occupied Europe I don't know. Taubadel remarried in 1948 so they divorced or separated at some point during or just after WWII.
It's a very interesting story, though.