This flag is network-wide, and its problems are well known.
The real purpose of the flag is to delete gibberish. It is supposed to mean "your attempt at communication is of so low quality, I can't even start to understand you". It can include posts in languages other than English, posts consisting of banging on the keyboard, posts of grammatically correct English which still make no sense (a "colorless green ideas sleep furiously" type of writing) and more in that vein.
But people apply "low quality" to many more problems. So they logically start to apply it to any kind of post which doesn't meet their personal standard for a good answer - as you said, it can be answers without explanation, wrong answers, etc. This is not just using up moderator time, it is actually against the way the site works. Deletion is only for posts which do not meet our bar of "is it an answer". Everything that is an answer and on topic, even very bad answers, has to stay. The rationale behind it is that it is popularity (as expressed in votes) which decides which answer should be worth reading. The moderators' opinion should not be used to censor bad answers, only to keep the answer space free of nonanswers, and also to remove off topic content.
As far as I know, two solutions have been suggested to deal with the problem. One is to rename the flag into something unambiguous (disclosure, this is my own Meta question). The other says that there is no benefit in distinguishing between low quality flags and not an answer flags, since they both get handled in the same way (deletion if correctly cast), so the two flags should be combined. So far, neither has been seen as high enough priority to get implemented.
