I will only use flaps in two situations durign a dive in the game, and when I do it's usualy only one or two notches as anymore will get blown-up rather quickly or cause too much rise in the nose that I'm trying to acuratley aim on my target through.
1.) I'm already slow and trying to force an overshoot or slow down my plane more than is normaly possible with the nose down and throttle cut.
2.) I'm trying to buy more time in my dive to aim, hold, and fully drop maximum ordnance on a single designated/desired point/target. IE: A CV or VH that I start my dive on less than 5k. If I'm high enough in alt that I'll have enough time in a power-off dive to acomplish this then I won't use flaps, for two reasons - one being you already should have enough time, and when starting at a higher alt, the target is smaller so flaps can easily cause a bad miss - and the second being is to retain more speed/E which is always useful.