I don't quite like the current way, it's very unergonomic. "US + US" means (or at least supposed to mean) "US English", but looking at the "US" icon alone and the icon + title combo (which is "US + US") doesn't make this clear. Perhaps there needs to be some indication that it is "US and English" in both icon and title. Ditto for "GB + British". I'd say language indication should be "the main part" of the icon and the country flag the secondary to differentiate between, say, US English and UK English.
Attaching a mockup image how this can be improved. In essence that would be a mixture of old and new ways. The icon can be bigger if needed (e.g. same height, twice as wide).
Color is very important aspect here, e.g. when switching keyboards quickly you can look at the text you are entering and just notice a color change by your side vision to know you are using correct keyboard without actually looking in there (*). Without color this is impossible, you really have to move your focus of attention away from text, onto the menubar, in there you have to figure out where exactly is the keyboard icon (because there are quite a few icons and they are all similar) carefully change between some cryptic "XY" and "YZ" and after that return back to text. Repeat again next time you need to switch the keyboard. Quite a torture and a distraction.
(*) By this logic black background is perhaps a bad idea either, each language should have a color (even if randomly selected) to easily (i.e. by the side vision only) differentiate between, say, "CA. French" and "CA. English" keyboards.