I have a subscription to MS 365 and hence the supposedly latest and greatest of Outlook. The older link from 2017 describes pretty well all that you can do with the flags today in 2022 (including some impractical workarounds)
... but simply popping up a window over the flag with 255 characters of one's own notes is not one of the features
... unless someone comes up with an idea ...
Edit: In the olden days of paper letters, one jots down notes on the paper. Why isn't the equivalent possible after decades of email?