It looks like the plan had been to allow teachers to disable the Flagged Questions in a Quiz.
It was raised back in 2010, but I can't figure out how to do this in Moodle 2.3.3
"Apologies if I'm missing something obvious, but I can't find a setting for teachers to configure whether flags are used on a particular quiz (as mentioned in the specification Development:Flagging questions during a quiz attempt). Just wondering whether this has not yet been implemented?"
Was this enabled?