Thank you for reporting this issue, we are aware of issues scaling flags in 2023.1 Preview 2 and have reported this to our development team to be resolved. Please stay tuned for update announcements, along with their Release Notes available here that will contain more information on fixes and known issues for each update.
The flag issues reported above should have since been resolved. If you are still experiencing issues with these, please submit a bug report for our team to investigate using the Contact Us button on the community front page here: https://twinmotionhelp.epicgames.com/s/
Unfortunately we have had to remove the ability to scale the flag assets in recent versions of Twinmotion as the system we use to simulate physics on the flag is not really meant to be scaled, and doing so would cause issues with these assets. At this time we will recommend submitting feedback directly to our development staff regarding specific dimensions you will need for these assets, so that we can look into incorporating the additional dimensions in a future update. Please submit dimension requests at our Public Roadmap here: https://portal.productboard.com/epicgames/3-twinmotion-public-roadmap