First off, having a single (or even a few) declined flags on your account is generally no big deal. It just means that the moderator who handled the flag disagreed with the flag as raised. Nothing more; nothing less.
As for the flag response text, there's a handful of answer texts to choose from, or the moderator can choose to type up something custom. For me, if one of the prefabricated answers apply, I'll generally pick that, even if in principle a more detailed response could be written up. There's also very little room to actually elaborate on anything there; IIRC, the length is limited to a maximum of 200 characters.
With that out of the way...
I was the moderator who handled that flag.
The timeline, as I saw it when handling the flag, was something like:
- First question posted on July 12, 13:56 Z
- Second question posted on July 12, 15:55 Z
- First question put on hold on July 13, 01:28 Z
- Second question flagged by you on July 13, 01:29 Z
- Second question voted to be put on hold as duplicate on July 13, 02:45 Z
- I handled the flag on the second question July 13, 07:50 Z (and likely saw it soon before then, though that's not logged)
- Second question put on hold as duplicate July 13, 10:58 Z
There is no easy way to see before a question actually gets put on hold who voted to close (and correspondingly for voting to reopen) unless there's a corresponding specific comment, but note that by the time of #6, the question had already been voted on to be closed as a duplicate, as evidenced by the existence of a "possible duplicate of" comment at the time from a user with close privileges and a non-zero number of close votes at the time.
I therefore concluded that this was something the community could handle, and I know that low-quality closed questions are cleaned up after a while; in this case, unless net voted up (score above 0), after being closed it (except as a duplicate) would be a candidate for deleting as RemoveAbandonedClosed. If closed as a duplicate, it would likely remain, but closed.
Also, questions posted by the same user is one major exception where the community can close unanswered questions as duplicates; as per Why are some questions marked as duplicate?
The original question generally must have an answer; questions may only be marked as duplicates of unanswered questions on meta sites, when the questions share the same author, or when closed by a moderator.
(My boldface here.)
I therefore concluded that diamond moderator intervention was not required, at which point the situation should have been handled via a standard close a duplicate flag or vote, not a custom flag. Flags are not super-votes. I also, in general, personally try to avoid using diamond moderator powers except for really obvious (or at least potentially problematic) cases, when the community can handle (and is handling) the situation.