Scott and I get emailed every time that software trips so we can quickly look at which threads are being penalized and reverse the penalty when it isn't helpful. The only time we don't do that is when we're sleeping.
We tend to call it the 'overheated discussion detector' these days, since it detects more than flamewars. However, that phrase is more awkward to say than 'flamewar detector'. If anyone can come up with a better name I'd love to hear it.
Turning that software off is not an option, because HN would be overwhelmingly more dominated by flamewars if we did so. It's not primarily the individual threads that I fear, it's the systemic effects of having them be more dominant. HN exists most of all for the quieter, deeper, more out-of-the-way finds that would be the first to get excluded under such a regime. That would really be an existential risk to HN.
Incidentally, that last point generalizes. When people complain that we don't do X, for some obvious X, it isn't because we don't value X (e.g. free speech or whatnot). It's because we're worried about systemic effects.