I’VE FOUND A FIX FOR THIS PROBLEM!!!
I noticed that the only Setlists that were locked to Current Preset / Current Snapshot, were Setlists that had NOT had a preset added AFTER updating to v1.4.
So I tried adding a random Preset to a Setlist that was locked within a Song, and when I go back in to the Song and try to add a Flag, not only can I add a Flag from the Setlist that was previously locked to Current Preset/Snapshot, but even better, ALL the correct Flags from before the v1.4 update were back in place in the Song again, and work as they should.
If you don't want the Preset you just added in that particular setlist, you can clear it from the Setlist, and you'll still have access to that Setlist within the Song when you try to add a Preset and/or Snapshot Flag.
I have shot a video, which is 276mb, but that is sadly far too big to upload here, so I don't know how to share that with you guys - hopefully my explanation will be enough.