A user asked a question on a Stack Exchange site in good faith, but it was a very poor-quality question and ended up getting deleted by the community. Shortly after it was deleted, the asker edited it, replacing it with a rude/abusive screed, which then appeared in the "Undelete votes" list. What's the right way to handle this? It can't be "raise a rude/abusive flag on it", since you can't raise that flag on something that's already deleted, even if it wasn't deleted for that reason. My best guess would be "raise a custom mod flag on it", but that's what I did, and the result was "declined - flags should only be used to make moderators aware of content that requires their intervention".
I saw your custom flag. As I went to handle it, another moderator beat me to the punch. As you mentioned, that other moderator declined your flag, indicating that moderator intervention was not required. I did not understand that decline, and I thought that some action was required, so I went ahead and handled it as I normally would. There is, of course, no way that a flag's "declined" status can be retrospectively altered, so there was nothing I could do about that. I figured you would just get over it. :-)
In the future, I would certainly recommend a custom moderator flag for situations like this. Perhaps not for simple vandalism (it's ultimately a judgment call, but vandalism of deleted posts really doesn't hurt anything and may not even be worth moderator time to review), but certainly when someone decides to get rude/abusive. At a minimum, nonsense like that should be rolled back. In other circumstances, a moderator may even decide to reach out to the user with one of the canned messages reminding them of our Code of Conduct. (In this case, I did reach out to the user, and they responded favorably. It seems they were just frustrated.)
I have no idea if non-moderators can roll back edits on deleted posts. If so, I suppose you should have done that instead of raising a moderator flag. Either way, I suppose that is what the moderator who declined your flag assumed that you should have done. It is sometimes difficult to keep track of which flaggers have which privileges.
In The Tavern I suggested:
"Nice hack to edit and leave closed -- In Review Queue: click title, edit, back, and click leave closed; only related choice on menu was "reopen and edit" which wasn't what was needed.".
In this case replace the first occurrence of the word "edit" with "rollback".
Then simply roll it back and leave it deleted. That does the needed and retains your vote. It ought to have been rolled back before leaving it deleted when you return to the queue.