Liam O'Hanna, whose stage name is Mo Chara, is alleged to have waved the flag of banned militant group Hezbollah during a Kneecap gig in London in November 2024.
The 27-year-old was charged in May under the Terrorism Act, under which it is a criminal offence to display an article in a way which arouses reasonable suspicion that someone is a supporter of a proscribed organisation.
Belfast-based Kneecap, who rap in Irish and English and regularly display pro-Palestine messages during their gigs, previously said the flag had been thrown on stage and described the charge against O'Hanna as an attempt to silence them.
Prosecutor Michael Bisgrove told the court the case was not about O'Hanna's support for the people of Palestine or his criticism of Israel.
"He is well within his rights to voice his opinions and his solidarity, as is anybody else," he said on Wednesday.
"The allegation in this case is a wholly different thing and deals with the video recording showing that, in November of last year, Mr O'Hanna wore and displayed the flag of Hezbollah ... while saying 'Up Hamas, up Hezbollah'."
O'Hanna's lawyer, Brenda Campbell, said the defence would argue the charge was brought after the six-month limit to bring such a charge.
"If we are right in relation to that, then this court has no jurisdiction and there ends the case," she said.
A further hearing would be held on August 20 to determine whether the charge was brought too late, Judge Paul Goldspring said.
Hundreds of supporters had gathered outside Westminster Magistrates Court before the hearing, including some Northern Irish politicians and musicians, singing and waving Irish and Palestinian flags.
O'Hanna had to push past a huge scrum of photographers when he arrived, with some supporters forcing their way into the entrance of the court, chanting "Free Palestine" and "Free Mo Chara".
