Your profile currently shows a single declined flag, so I assume that's the one you are talking about; that particular flag was handled by Tim B. I've taken another look at the answer, and the below is how I would reason.
Flags should ideally be used for content that is basically "unsalvageable" within the scope of the site. As you say that after the comments and the (later, small) edit, you feel the answer does answer the question, it follows that the edit turned the non-answer into an answer. That, to me, indicates that the answer was still an answer earlier, it was just in need of clarification of exactly what the answerer meant. It is also important to note that by the time Tim handled the flag, that edit had already been made. Especially taking those two together, declining the flag seems to me to have been an appropriate course of action at the time it was done.
Hence, the timeline was: post answer -> flag answer -> edit answer -> review flag -> decline flag as invalid.
Consider the answer downvote canonical reason: This answer is not useful. That sounds applicable to an answer that needs to be more explicit about exactly what the answerer feels is the answer to the question. (Once the answer is clear, it may still be wrong, which should warrant downvoting.) You don't say whether or not you downvoted, but there are no current downvotes on that answer, and I can see no evidence that the answer has been downvoted in that past and those downvotes reversed after the edit.
Hence, at the very least and by your own admission, at the time Tim handled the flag it was no longer valid, and at the time the flag was raised, really what the answer needed was a small amount of clarification about what the answerer felt the answer to the question was. That can be handled by commenting and downvoting, and does not require moderator intervention. (If you leave a comment asking the answerer to clarify an answer and after some reasonable time they have not, that may be reason to flag the answer. But do make sure to give it at least a few days or so; not everyone visits the site every day.)
To try to sum up: an answer being wrong (technically inaccurate) is not a reason to flag that answer; as I said above, it is a reason to downvote. Even more so on a site with as wide-ranging topics as the Worldbuilding SE, moderators are not and cannot be expected to be subject matter experts in every subject that ends up being asked about on the site. In this regard, think of us moderators, when we act in the role of moderators, more as janitors than experts.
- If you feel an answer is wrong or in need of clarification or expansion, then downvote, ideally following up with a comment and/or take it to chat as appropriate so the answerer becomes aware of what is wrong with the answer. Be willing to acknowledge that perhaps the problem was simply a misunderstanding that can be fixed by rephrasing the answer without actually changing its content. Do not flag just because an answer is technically inaccurate; "only technical inaccuracy" is even specifically a reason to decline a flag. Always respect the original poster; if they do not want to edit the answer (for whatever reason) after you make your case why the answer is wrong, respect that decision, but do consider downvoting answers which you feel are incorrect. Better yet, post an answer of your own with your view of things (take care to not make it dependent on any other answer; the question and any one answer should make sense when read together with no other context).
- If you are able to fix the post without changing the original poster's intent, then edit to fix the problem. Everyone can propose edits, and users with (currently) 1,000 rep or higher are able to edit immediately without community review. Keep in mind that editing a post bumps the question to the top of the front page, so please try to make edits substantial enough to count even when you have the rep to make minor edits.
- If a post is outright gibberish, spam, etc., is unlikely to be salvagable or even is outright unsalvagable (into some form appropriate to the site), then by all means flag it with an appropriate flag reason.
- Given appropriate reputation, when appropriate, prefer voting to close, voting to delete, voting up/down, etc., over flagging. Flags show up separately to moderators, and we prefer keeping that to only content that actually requires moderator attention. This is not meant to say that you cannot flag; it's better to flag once too much than once too little if you are uncertain. However, flags do end up in the moderator queues, and there are only three of us, so if some other action which you have access to will do equally well through community reviews, prefer that other action over flagging.
- Always flag spam or offensive content with the appropriate system-provided flag reason. Do not use custom flags for these. If enough people flag with those specific reasons, the flag is handled automatically by the system without requiring further human intervention. This automated handling does not work when people use custom flag reasons, even if the custom flag reason is for example "spam!".