Many on social media have noticed and criticised the choice of jewellery as a fashion statement in front of Markle, who is the future wife of Prince Harry.
Some questioned whether she deliberately wore it to upset Markle.
Princess Michael has apologised for wearing the brooch.
A spokesperson for the royal said she was "very sorry and distressed".
The statement said: "The brooch was a gift and has been worn many times before.
"Princess Michael is very sorry and distressed that it has caused offence."
Markle, 36, has been open about her cultural heritage, telling the world that she is "bi-racial".
The American TV actress and a divorcee penned an essay for Elle UK in 2016, where she addressed the issue, saying: "To describe something as being black and white means it is clearly defined. Yet when your ethnicity is black and white, the dichotomy is not that clear. In fact, it creates a grey area. Being bi-racial paints a blurred line that is equal parts staggering and illuminating."
"She also talked of how her background affected her ability to book jobs in the acting industry.
Being 'ethnically ambiguous', as I was pegged in the industry, meant I could audition for virtually any role. Morphing from Latina when I was dressed in red, to African-American when in mustard yellow; my closet filled with fashionable frocks to make me look as racially varied as an Eighties Benetton poster. Sadly, it didn't matter: I wasn't black enough for the black roles and I wasn't white enough for the white ones, leaving me somewhere in the middle as the ethnic chameleon who couldn't book a job," she wrote.
She will be the first American whose marriage to a member of the Royal Family will be welcomed by them.
Prince Harry and Markle released a series of portraits by New York-based fashion photographer Alexi Lubomirski to mark their engagement today.
Lubomirski, a former assistant to Mario Testino, famed for his photos of Harry's mother Princess Diana, took the pictures this week at the royal retreat of Frogmore House, near Windsor Castle, west of London, where the couple are due to marry on May 19.
"I cannot help but smile when I look at the photos that we took of them, such was their happiness together," Lubomirski said.
Queen Elizabeth's 33-year-old grandson, Harry, fifth-in-line to the throne, and Markle, who stars in the US TV legal drama Suits, announced their engagement last month.
NZ Herald.
