This is how many Flamencos tie the excess string. I believe the reason for that was originally this: many Flamenco guitarists use olive oil to make the fingers of their right hand glide better over the strings. Some have a little sponge with oil attached to the bout of the guitar, others have a little sponge in a cup somewhere within reach. Well, olive oil is very rich and deadens the strings within an hour or two. Leaving the strings uncut and tied as shown in the photo means that one can take them off, turn them around and restring them. This was also important because Flamenco guitarists couldn’t afford to buy new strings for every gig! To this day the best Flamenco guitars cost only a fraction of the top classical guitars. I believe the reason for that is that classical musicians are used to paying top dollar for instruments, but Flamenco guitarist aren’t and often can’t.
The oil helps especially when the air is humid, which makes the strings very sticky. Instead of using heavy olive oil I prefer to use the much lighter natural oil of the skin and you might see me reach my right hand to my forehead for lubrication several times during a show. That’s a little trick guitarist Daniel Ward showed me in 1997. Until then I always struggled in humid conditions. I was used to the very dry climate in Santa Fe and playing in Florida in the Summer represented a big struggle for me.