Can anyone identify these?

Crazy Climber

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Hey guys
I'm an atari collector and another collector friend of mine came across these 2 arcade items that niether of us are familier with. The pins are in the pic for refference of size/picture used but does anyone know what the heck these were? The guy he aquired them from swears they were shipped out like this. At first I thought they were cut out's from arcade T-shirts but I guess not. The fraying edges is from 30 years of storage. Anyone remember these? What the heck were they used for? Towels? Bandanas?
One is a centipede and one is a tempest. Any help would be great, were stumped...
 

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I'm not 100% on this but I remember seeing similar pieces, not arcade related, pinned to the backs of denim jackets.
 
like this:

1172292233_d9a9c7c1c5.jpg
 
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