This is happening with an O365 server and Outlook 2016 Version 2109 Build (14430.20234)
I have a user whose Flags are not setting as intended. When she is composing an email, she will set a Flag for herself via Follow Up\Add Reminder and chooses Flag for Me. But when she sends the email sometimes the Flag gets set for the recipients. This is an intermittent issue but I've been unable to find a pattern nor reproduce on my system running 2016 ver 2110 (Build 14527.20234)
I've wiped out her OST. I've wiped out her entire Mail profile. I've uninstalled/reinstalled Office 2016. I even wiped out her entire Windows profile and created a new on. No change. In researching this issue, I have found 2 instances of this happening with no solutions. I once took her out of Cached Mode which slowed down her productivity so thoroughly she elected to go back into Cached Mode even if it resolved her issue. Unclear if being out of Cached Mode resolved her issue since it was only half a day.