I don't think flares have any meaning at the moment in ROF. AI pilots certainly don't seem to react to them.
Spoon
Actually,
In the beta career, as a flight leader, the flare commands do seem to work. I think

Anyway, if you issue the Command to rejoin formation (or whatever it is called in the HUD menu), your pilot fires a green flare, and the AI wingmen stop what they were doing and form up on you.
If you issue the Return to Base command, your pilot fires a white flare.... and say goodbye to your wingmen, they are headed home.
The green, white and red flares fired by the airbases are triggered by proximity and/or timer triggers....
I believe at the start of a mission where you see a green flare signaling the command to takeoff, what has happened is a timer (which began ticking when you entered the mission) triggered the flare, and also triggered the command to takeoff (for AI aircraft). I believe the white flares you see fired by the airbase when you return from a mission are triggered by the lead aircraft's proximity to the airbase (after completing the waypoint route).... And red flares fired byt the airbase to indicate "incoming bandits" are also triggered by proximity of the bandits to the airbase...
Or this is how it appears to work when opening up career missions with the mission editor

Best wishes.