Having just read:

I find I have the same problem with flag.exe. With a mapped drive and a
reasonably simple directory structure, I get the following error after
issuing the following command.

FLAG W:\setup.inx /NAME=.user.ou.o
FLAG-4.16 PTF-980818-625: This utility was unable to allocate the volume

I have considered the problem may be with long file names and have tried
variously surrounding the file names in quotes. No joy. I believe this
should be possible and easily accomplished using the netware flag utility
and reject the notion that a third-party application should be required.

Unfortunately, if flag.exe doesn't work the only other free alternative
that I know of is to change file ownership for thousands of files
one-at-a-time and by hand in ConsoleOne.

Your help appreciated!