There are several reasons for flagging answers as "very low quality". They include, but are not limited to:
Unrecoverable formatting issues. If a post can be edited to improve, you should do so. If this is not possible, then you can use the VLQ flag to indicate the post is not recoverable. A moderator then has the option to try and edit the post or, if not possible, delete it. They may notify the user of the reason for deletion, in hopes they may edit and flag for undeletion.
the answer is incomprehensible. It may be an answer, but it's so bad that it could never be saved through editing.
However, the "very low quality" flag should not be applied to an answer if:
The answer is incorrect. It is not the job of moderators to deal with answers that are incorrect in some respect. Users should downvote wrong answers and (optionally) leave comments that describe why they are wrong. The answerer would, in the best case, update the answer to fix whatever issues it has, or delete it. We even have a badge for that.
The answer needed flagging, but the wrong flag was used. Users may flag an answer as "very low quality" when in fact they should have flagged it for another reason, such as "not an answer". Since the flags are used for the review queue, the flag will be declined.
A "very low quality" flag on an answer that is technically incorrect should be dismissed. The moderator may take into account the quality of the answer when deciding to mark the flag as "helpful" or as declined for one of the standard reasons.