Yes, we review flagged posts. I wouldn't say we review why things get flagged, exactly, because we can only guess at that. But we try to keep an eye on things and turn flags off when the article seems substantive and able to support a substantive discussion. We also rely on users giving us heads-ups at hn@ycombinator.com when they think we should take a closer look at a thread.

Most stories and threads that get enough flags to win the tug-of-war against upvotes are just not very good or on topic for HN. Partisans of one side or the other on an issue tend to feel strongly about it, but the bulk of the audience is here for interesting things to read, and the site has a very clear mandate that way: https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor..., https://news.ycombinator.com/newsguidelines.html. So most of the time, when people feel strongly that a story shouldn't be flagged, we end up disappointing them; fighting these battles is not really what HN is for. Still, there are fairly frequent exceptions.

I should add that when an account has a habit of flagging submissions that are on-topic and good submissions for HN, we eventually take away their flagging privileges.