In a couple of the older versions, as that given by Jim Carroll, the 'black velvet band' itself is more than a synecdoche for the ticklesome damsel in question; it seems to be an item of fashion associated with ticklesome damsels (i.e., 'party girls'?) generally, if not a prostitute's shingle:

Flash girl, if you wish to turn modest, and strive a connexion to gain,
Do not wear a band o'er the forehead, as if to tie in your brain;
Some do prefer Victoria fashion, and some their hair braided so grand
Myself I do think it much better than a girl with a black velvet band

Does anyone have any knowledge or thoughts about this?