Flags are for modules developers.
They can create any arbitrary flag while writing their module, and it can then be associated with such and such group.
Not much use to the webmaster himself, unless instructed to created certain flags by a module developer.
Basically if you were to ask an external programmer to code a new feature on Sdglive, that programmer could use his own set of flags to determine groups privileges and that would survive future software upgrades gracefully.