The cabin crew or their training manuals need to be updated then. I can't remember the last time I flew with an airline which stated that Flight Mode wasn't OK.
Flight mode switches off any feature that transmits or receives using a radio signal (Wi-Fi, Bluetooth, GSM/3G/GPRS/Edge, GPS). In the case of smart phones which mostly double up as music players in the air, you cannot force people to turn them off simply because they have an off button and look like a phones!