Which statement is true about an aircraft that displays an improper beacon code?

An aircraft displaying an improper beacon code indicates that it has been assigned a specific beacon code but is transmitting a different code instead. This situation might arise due to a number of factors, including pilot error, equipment malfunction, or a transponder misconfiguration. Correct communication of an aircraft's beacon code is crucial for air traffic controllers, as it helps in identifying and tracking the aircraft accurately. When the wrong code is shown, it can create confusion regarding the aircraft's identity and its intentions, which can complicate air traffic management and increase the risk of miscommunication.

The other options do not accurately reflect the implications of an improper beacon code. An aircraft returning to its departure airport or entering a holding pattern does not inherently relate to its beacon code being incorrect. Emergencies typically involve specific transponder signals (such as squawking 7700) rather than a general reference to an incorrect code being displayed. Each of these scenarios has distinct protocols and responses that do not directly indicate a beacon code issue.