abgd,
I’ve not flown formation with FLARM so I don’t know, but the algorithms are surprisingly sophisticated. It is not just a proximity sensor.
Each unit broadcasts not only location and altitude, but also track, groundspeed, altitude change rate and current turn information. The receiving unit uses this information to predict the track of each aircraft and determine if a collision risk exists.
For example, if circling with a glider at the same altitude but on opposite sides of the thermal, there won’t be any alarm.
If approaching an opposite direction, co-altitude glider on a ridge, you will hear a warning followed by a collision alarm, until the other glider is in your 10 o’clock or so, at which point the algorithm determines you are passing each other and decides there is no more collision risk.