Flagging is mostly done by users (who have enough karma). It is just toggle (no reason entry form), and I believe it is the same for the moderator version.

The reasoning generally should be non-adherence to https://news.ycombinator.com/newsguidelines.html but that's not particularly enforceable. This is balanced by the vouching system, as well as moderator unflagging.

https://news.ycombinator.com/newsfaq.html#flag