I believe that you're correct, a disputed flag is a flag that was issued on a post that then received an "invalid flag" flag from a 10K+ user. Due to the recent change in how flag weight is managed for this situation, disputed flags no longer impact flag weight.

A disputed flag is a flag that was issued on a post that then received an "invalid flag" flag from a 10K+ user.

For "Very Low Quality" flags, an edit on behalf of a moderator will automatically dispute it (VLQ is intended for posts that are unsalvageable).

Due to the recent change in how flag weight is managed for this situation, disputed flags no longer impact flag weight.