If the balls rolls onto the flag stick it usually kills the momentum and allows it to drop in the hole. If it bounces higher up it usually deflects the ball sideways 5 to 20 yards away from the hole..
I don't bother remove the flag stick with any shot. I have had more chip-ins and pitch-ins with the flag in then some weird deflections that were painful.
Controlling the power on shots is vital. But some people like to hit past the hole and allow spin to bring it back. In that case it can be detrimental.
To each their own, but I was also curious as to why some people do it.