I didn’t see the Detection Settings screen to show where you set Motion Detection Sensitivity, but that may not really matter at this point, and I think the other visuals are helpful! 
With the flag right in the middle of the camera’s view and the Detection Zone taking up the center of your image, I still think the flag-triggered notifications disappeared because you’re now using Smart Detection Events with a subscription, so if I were you I’d probably just turn the Detection Zone completely off to avoid excluding that part of your picture from detection.
If you wanted to screen the flag blowing activity out by using a Detection Zone without a subscription (like, if you’re trying Cam Plus for a month or whatever and decide not to continue it later), then I’d expand that exclusion zone in the middle. What I see when I look at the first two images is that the green Motion Tagging box is extending outside your exclusion area. When I overlay the two images, it’s pretty clear when you look at the box’s upper-left corner:
A general rule of thumb that I’ve seen in the Forum is to give whatever area you’re trying to mask out (i.e., the exclusion zone) a buffer of at least 1 additional box, so you’d want to navigate to your Detection Zone screen and make another 1-box grey border most of the way around the greyed area that you’ve already excluded. Basically, you want to go beyond where a blowing flag is likely to cause a generic motion-triggered event.
In your case, though, sticking with a subscription might be the better choice. That’s the easy way to exclude the flag as a trigger, and you get other potential benefits. If you want to do this without a subscription, then it’s probably going to involve a lot of trial-and-error tweaking to your Detection Zone and potentially moving your camera to get a different vantage point (because you’re going to end up blocking out a big area in the center of the view that you might not really want to exclude).