This is what the CC website says about the "Flag" button:

"Flagging a comment notifies staff, so before you flag a comment, make sure you've considered it for a moment--you should only flag comments if they contain abuse or harassment, spam, threats, or if the username and/or avatar is offensive.  Once you've determined that a comment does indeed merit a staff notification, you can click the flag button in the lower lefthand corner of the comment in question, and select the reason for flagging. Keep in mind that flagging comments without valid reason will have a negative impact on your trust rating, and if you continue to do so, over time, your flags will cease to count."