That already happens. I got my flagging powers removed after over-using flag in the past. (I eventually wrote an email to the mods pledging to behave more judiciously and asked for the power back). As a user you won't see any change in the UI when this happens; the flags just stop having any effect on the back end.
There is one subtle clue. If your account has flagging enabled, then whenever you flag something there is a chance that your flag pushes it over the threshold to flagged state. If your account has flagging disabled, this never happens. This is what hinted me to ask dang if I'd been shadowbanned from flagging.
