I don't fail them usually - I expose them; and once I asked a student to leave the room because they were blatantly unprepared despite me warning them before.
My main point is: flipped classroom works great in some contexts but is no panacea and requires setting clear expectations.
Aside: as English is not my native language: "you fail them" can mean both "you give them a failing grade" and "you fail to provide the support they need", right?