Only Johnny & the folks at Diamond know for sure. Patches are given out to players like candy. Players get anything from a few bucks to free product for wearing patches.
Personally I don't give a 2nd thought when I see a player wearing a patch. When you see a picture of a player in the advertisement for a billiard product in one of the magazines, that is a sponsorship. Take a look, there aren't many of those in the pool magazines but the patches are a dime a dozen.
The patches are a way for the player to get a little jelly and the company to get some exposure at a considerably cheaper rate than normal advertising costs.