On the
FDR readout that has been linked previously, it shows that the Master Warning for an Eng 2 flameout was correctly triggered upon the drop in ITT, fuel flow and torque on #2.
Unless there was a serious miswiring in the warning system or a mistakenly swapped lens read "Engine #1" instead of the correct engine on the annunciator panel, I think it is improbable that the crew was presented the wrong indication.
What surprises me quite a bit about the graph is the change in PLA #1 at about 2:52:43 that comes together with the #2 engine failure and the consequent systemic demand for uptrim (that can be seen on the objective TRQ curve). I would not exclude the following scenario: the crew felt the yaw from the #2 failure, looked at the engine indications to find the unusually high #1 torque indication and consequently were at least tempted to apply the "Unscheduled Prop Feather" checklist to #1. #2 power lever seems to have never been moved in consistence with a shutdown procedure, and even seems to have been increased in search for an uptrim.