I open this, hoping others can use it to discuss about jam rules.

Here's my question: is it ok to change sprite flags?

Thanks!

Yes! Relevant bullet below, my emphasis added:

LIMITED SPRITE RE-COLORING: You cannot CHANGE the sprites, other than colorizing them with live PAL and changing transparency with PALT, or colorizing them in the editor as IF they were changed with PAL and PALT (you cannot essentially add detail). That includes drawing in, POKEing in them, and other techniques. (**You can set flags on the sprites and of course, flip them all you want.**)

Gosh I missed that! Thank you