Apparently it was just a mistake, one that's since been corrected.
BusinessInsider.com reports that an MLB source says New Era Caps released the wrong image on its special Fourth of July edition Cleveland Indians hats, believing all teams would use their primary logo. For Cleveland, that primary logo is "Chief Wahoo," the offensive Indian caricature.
All MLB clubs will wear caps with red-white-and-blue-patterned logos on July 4, to celebrate the American holiday of Independence Day. While the "pattern looks silly on most teams, it looks downright horrible on the Cleveland Indians cap," says BusinessInsider.com. "Nevermind that the logo is already an ignorant caricature of a race of people and nevermind the short-sightedness of covering a Native American logo with stars and stripes. Many feel the logo just looks a little too much like a Blackface cartoon."
The Cleveland AIM has long waged an effort to get the Cleveland team to replace its name and the racist "Chief Wahoo" mascot. But club president Mark Shapiro has stated that the mascot isn't going anywhere. At least it won't be going on these holiday ball caps, though.
The replacement cover now sports the letter C stitched across the front in block lettering, covered in white stars with red and blue trim, seen here: