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The flag waved at the start/finish line to signal the end of a session or race. When you see the checkered flag, complete your current lap at a reduced pace and return to the paddock.
The HPDE First Timers Guide is emphatic: "Acknowledge the flag with a wave or a flash of your headlights, reduce your speed, and return to the pits. This last lap is a cool-down lap, not one final opportunity to set your fastest lap time!" The guide warns that "not responding appropriately or ignoring a flag is a serious matter. Any infraction will result in a discussion with the event chief instructor. You could be asked to leave the event, therefore it's critical that you are clear on what the flags mean and how to respond to them." The cool-down lap serves a mechanical purpose — brakes that have been working at extreme temperatures need gradual cooling to prevent rotor warping and pad glazing.