I joked recently here that the "Flag or disagree" button is misleading in that there is in fact no "disagree" option presented. This bugs me most, of course, when I go through the queue and see flags I disagree with -- there's the plain as day invitation, but the interface does not fulfil the promise.
Yet obviously there is a way to cast an "invalid flag" vote since those are noted on the right. On the U&L help page for the moderator tools privilege, there's a section about "Handling flags" which notes:
you have a number of options [...including] Flag as 'invalid flag'. Use this option if you feel the flag should be ignored or not acted upon by moderators. This will be visible in the flag list.
I've had this privilege for a while but still can't find the option. What's up?