I've ridden segments that were flagged. They still show up, but they just don't have the ranking. Here's one that I know of:
http://app.strava.com/segments/864851

Truthfully, I didn't think it was any better/worse than anything else on this ride. I've been on more hazardous segments that aren't flagged. I think someone got PO'd that he got kicked out of a KOM and flagged it.