I think I've found more details on the missing backfire issue: it's a bug linked to the controls. If you play using the keyboard defaults the flames are still there when upshifting (Win 10 latest version, both original and FXT content). As soon as you switch to a controller (I'm using an Xbox 360 wireless joypad) they disappear.
Basically, the flames aren't shown on screen when the player is using anything other than a keyboard. You can even try playing with the keyboard, then switching to the controller, and see that they are "disabled" by the external device and come back when you accelerate with arrows.
Crazy, but it's probably a bug not even the devs knew existed. I don't know if it can be solved by "mixing" the control configs or in any other way, I just wanted to share this information.
EDIT after playing a little more with the controls configuration, I'm 99% sure it's a Direct Input bug. If you assign the accelerator and brake to any face buttons (or if you play with the keyboard), the backfire/flame animation shows up when upshifting. Since Direct Input doesn't see the left and right triggers (or pedals) as two different axis, using them screws up the game's logic.
I don't think there's any solution unless someone's able to swap Direct Input for Xinput in the game controls but that would mean hacking the game code itself
EDIT 2I found a workaround using Xinput Plus: swap controls between buttons and triggers. You get the flames but you lose analog input - not that I really care but hey...