The flag can be automatically set on Case creation and cleared on Case closure by enabling the "Set Flags on Case Creation" and "Clear Flag on Case Close" options below.

When a Case is created, a set flag will prompt your agents to take action and provide an initial response to the customer. 

Also, when a Case is closed and the flag is cleared, seeing that a closed Case has a set flag will indicate that the client has replied to a previous Case email. This, again, will prompt your agents to take action and the email will not be lost nor ignored.

Note: Cases created with a Closed status will not invoke the "Clear Flag on Case Close" setting. If your organization manually creates Cases simply for record-keeping purposes and no further action is needed on the Case once created, consider creating a workflow rule on the Case object to update the Case Flag Date/Time field to null, which will clear the Case Flag.

The "Automatically Clear Flags on Closed Cases" setting allows you to define a specific number of calendar days for which all Closed Cases should have their flags automatically cleared by Case Flags, since we recommend that Closed Cases do not have a flag set. Flagged Cases continue to be part of the daily batch job processing for those utilizing Business Hours, affecting the batch job’s performance. Please note that the timeframe for this setting is calculated based on the date the flag was set (Case Flag Date/Time - FLAGS__ViewedFlag__c), not the Case Closed Date.

This setting is disabled by default. When enabled, a new batch job runs nightly to clear the flags on Closed Cases that are part of the Organization-Wide processing, or have the "Enable Case Flags" checkbox checked.

When the flag is cleared by this setting, Case Flags History Tracking records will indicate an "Automatically Cleared" action so they can easily be filtered out of your reports. Optionally, you can manually clear the flags using Salesforce’s standard functionality.