The short answer is that there's no such thing as a 'kissing spear', though that certainly does seem to be what they are singing. The longer answer is that, as they say in their sleevenotes, they got the song (via Vic Gammon) from the Rev John Broadwood's collection (published 1843); Broadwood noted it in (presumably) the early 1840s in Sussex, printing the line as

hang out your silver tankard upon your golden spear

Why the Watersons (or, perhaps, Vic) changed 'golden' to 'kissing', and what if anything it means to them, I have no idea. You'd have to ask them about that. It isn't what was traditionally sung.