They in no way had to sign off anything about that game. The GTA franchise is controlled by Take Two Interactive, not Rockstar North.
It was very evident that Rockstar North had no input into these games, or they simply weren't listened to, considering the game launched with obvious errors that clashed with the intended designs for the original games.
Edit: also, do you really think that Rockstar North of all people, the developers of the original Manhunt game and the same people that put a graphic torture minigame in the GTA5 mission By the Book, would somehow draw the line at the Confederate flag?