Yesterday I had some time to play around with it and got a few scenes deep into DL1 on Daphne. The first couple of scenes had no flashes, just audible tone signals. A few scenes later (a couple of rooms into the castle) doors and ropes etc began to flash as I remember they did years ago at the arcade.
Apparently in the original arcade the opening bridge scene doesnt flash for some reason but after that, things start flashing.
Doesnt seem to be consistent throughout every scene tho. Weird

Oh well, I guess that solves it
I checked out Dragons Lair 2 and it is much more consistent with the flashes as BadMouth mentioned. There is also an option to turn them on/off I believe in the service menu.