Hi Vaughn, your points have validity - I was with you (ie we're both "right") until you said the effect of flashing wouldn't be anything like reducing the paper grade. It isn't entirely straight forward as it depends on how a particular paper's overall curve 'shape' changes (or doesn't), by design, with a grade change in the case of graded paper, or with a change in filtration in the case of a VC paper. In some cases the flashing effect can be far more similar to a grade change than we expect. Richard Henry treats non-image exposure effects fairly extensively in his book, which has some interesting data/results (using Ilford Ilfobrom graded at the time). While I would not go as far as agreeing with his statement that non-image exposure is exactly the same as a grade change, it may or may not be quite similar depending on the paper.
I started a series of experiments on this a while back (because I sometimes use localized flashing and wanted to better understand what was actually happening) but photography interrupted them (thankfully). This discussion has reminded me to go back and finish those tests.
What I always found (visually), was that the contrast reduction effect extended further down than I expected, even into to the low midtones. Of course the effects were greatest in highlight areas, but they were not limited to the highlights, which is why whenever I use flashing, I treat it as a local adjustment (same as if I were burning in). But then this led me to another question - since I use VC paper, if I'm doing a localized flash, is it any different than a localized burn at low contrast? That's what led me to want to test all this.