The diagram on page 12 of this Powerpoint presentation on the Flarm
website shows very clearly the situations in which Flarm is most or
least useful:

http://www.flarm.com/files/basic_presentation_en.ppt

In busy contest thermal gaggles with lots of Flarmed gliders there are
so many alarms that you often can't tell or see which other glider is
Flarming you and have to regard it as a serious ongoing prompt to
vigorous Seeing and Avoiding - in the knowledge that the other pilot/
will also be getting an alarm and will hopefully be doing the same.
That is very useful in its own way but it is a very different type of
situational awareness from the use of Flarm in the cruise or
approaching a thermal gaggle.

I think that even if a magical Flarm were able to produce positional
and conflict information with zero error it would be impossible to do
much better for the case of busy similarly centered gaggles because
the gliders are continually making unpredictable centering and
avoidance corrections.

John Galloway