In most electromechanical instruments, the flag is little more than a confirmation of power.
Actually we've been seeing a lot recently of what Devil has been describing. It's often caused by a resonnance that sets up that sets up on the biasing mechanism (i.e. the mercury starts bouncing around in the switch at exactly the right frequency) and the horizon starts to slowly roll or pitch. It's usually tied to a particular gyro unit and a praticular aircraft configuration (High skids, low skids, FLIR hanging out the front, etc.) And it's usually triggered at a certain speed. We've seen it change with different manufacturing lots on the same model of gyro: You have a model that's worked in the helo for years, then you get a new one and it rolls off. Replace it two or three times and it still rolls off. Swap the gyro into a different aircraft and it works fine. I think part of it has to do with parts obsolescence or changes in manufacture that have come in as the number of electro-mechanical instrument manufacturers dwindles.
Anyway, if you've recently changed out a unit or had some new gear glued to the outside of your helo, or to your instrument panel, watch for it.
Avnx EO