No it hasn't, and I highly doubt the developers intended the flag system to be used for a laugh in the final stages of the game.
That is the reverse. It is impossible for the developpers not to expect the flag system to be useless at some points, including the final stage of a scenario.
The developpers wanted the heroes to display self-sufficiency.
The developpers wanted the heroes to be able to grow stronger.
The normal consequence: as a scenario progresses, heroes become able to tackle bigger and bigger "quests". This includes to a certain extent final goals. It cannot be otherwise.
The success of a player in the game is measured by the capacity to allow heroes to reach the point they are able to clean the map by themselves.
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Life or death choices: framing the problem.
Setting A: game including units unaware of and unable to strategize to complete short-term/mid-term/long-term goals.
Setting B: game including units aware of and able to strategize to complete short-term/mid-term/long-term goals.
In setting A, every decision taken by the player are life or death decisions as the units cannot put anything by themselves. Decisions only differ in their magnitude. A wave of critters will take longer to bring death if the player does not decide on ending the threat.
Setting B reduces or negates the number of life or death decisions. This by design.
Most games include now short-term goal (self-preservation) handling.
Majesty's heroes are capable in short-term goals and arguably mid-term goals.
Majesty 2 leans strongly towards setting A.
The trouble is that games for which setting B was chosen are intrinsically weaker on the life or death decision. Their evaluation should not be seen through this scope but whether or not they manage to get their unit aware of and able to tackle the various goals.
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Flag necessity: back in the days, when arcades were still lively, one rule was popular with Street Fighter: one coin, no block. It was nothing more than bragging and showing off. Playing with blocks was more efficient.
Similarly, fact that it is possible to complete Super Mario Bros 2 by skipping most of the levels does not hint at a design flaw.
A lot of FPS can be completed using one weapon only (like grenades for example)
It is possible to complete Silent Hill without using the flash light. Serious business as Silent Hill fear building up mechanics rely on the flash light: monsters are attracted by the light and you cant see in the dark, which presses the use of the flash light.
All these examples are features rendered non necessary by skill. They are not the standard gameplay.
Same for Majesty. It is possible to bypass the flag system but using it makes progression much smoother.
An example of failed design is for example Mass Effect 2's soldier class. The manual states the soldier dominates the battlefield by the capacity to force the opponent in the gunfight he chooses. The analysis of the soldier's arsenal and special abilities confirms the point. He has long/short range weapons, slow/fast rate weapons, capacity to freeze time and rushing from one cover to another.
The trouble is the natural gameplay that emerges is the soldier using his AR and sometimes the sniper rifle and spamming the freeze time ability. When the player tries to take advantage of the soldier's other aptitudes, it makes the game more difficult. Not easier.
That is failed design.
To a lesser extent, in Majesty 2, on no boss maps, it is possible to build only rogues without a loss in efficiency. Which is a serious issue.
Using flags in Majesty makes the game easier. Non using them is possible on a number of maps but it is more difficult.
They are not necessary but their use is highly recommanded. To be compared to ME 2 soldier for which using only the AR is highly recommanded.
