I've resisted that on the grounds of not wanting to make things too bureaucratic, but I can feel myself tipping slightly on the question for a somewhat odd reason: there are too many mistaken/accidental flags, especially on mobile, so we probably need a confirmation screen to allow people to say "oops, cancel". If one adds that, it's probably fine to ask for a reason too.
Re the other questions: flags, above a certain threshold, act as downweights on the story. Above another (higher) threshold, the [flagged] marker appears. Above another (still higher) threshold, the story will also be killed, in which case it will show up as [flagged][dead] and closed to new comments. However, if a thread has already gotten a lot of comments, the software won't kill it. In addition, moderators sometimes put [flagged] on a post—but this is rare for stories; we do it more often on comments that are breaking the site guidelines.
So that makes 3 different ways for a story to end up [flagged] but not [dead]. The one you postulated (a story is [flagged][dead] and then we manually unkill it, so it becomes [flagged] but not [dead]) is technically possible and I can't say it never happens, but it's definitely not standard practice and would be a weird edge case if it did happen.
Have I answered your questions?
p.s. various past explanations can be found at https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
Edit: I forgot about another case. If a post is [flagged][dead] and then enough users vouch for it, it will stop being [dead] but will still be [flagged].