Is that true? I am not super familiar with the flagging system and have not tested it but my assumption would be that all flags would work the same way.
If custom flags don’t get the “auto hide” functionality, adding it is a feature request. Can you open a new topic for it?
Let’s close this topic because now it is at least possible to disable the provided “Inappropriate” flag and add a custom “Inappropriate” flag allowing free-text explanation for the reason why.