If people feel like you're spamming non-sense or being abusive/rude the will give you a flag. However, flaggers like to flag us for no reason and get away with it. Sigh We've just accepted our fate and go in with life. Anyways, we don't know if flags really effect us except that they take away one point from our score that doesn't actually do anything.
Do you see the exclamation mark and hazard sign with the reactions? That shows how many flags you have. A good example is my profile. The two things I have 800+ and 174 in are my flags