Is it wrong for a woman to flirt by smiling and touching the waist or shoulders of men she sees on the street? Is this a sign of a loose woman?

I wouldn't say that it's wrong. Personally some people like it when a woman does that while others don't. There really isn't a set definition of a "lose woman" so I wouldn't put that way. But you have to keep in mind that some people can see it that way, so if you do care about what people think of you, it's best to stay on the safe side and not touch him.

Although smiling isn't a sign of a "lose woman" in almost all mindsets. Smiling is just smiling. It's how you show appreciation and interest. So smiling is always safe.