b flag, or Boss Scaling, makes bosses more difficult if they hold Key Items that result in progression.
As of 3.1.1, how this works is that different key items are assigned a rank: the Chrono Trigger, Clone, and Ruby Knife are assigned 3, and the Blade, Hilt, and Dreamstone are assigned 2. Bosses that hold those items directly (with some exceptions, noted later) are scaled to match that rank, with higher ranks meaning higher stats. While some Characters are required for Go Modes, they don't influence the rankings.
If a ranked boss is restricted by another key item, such as a key item at Giant's Claw being restricted by the Toma's Pop, which itself is the reward after the Sunken Desert, then that second item (and corresponding boss) is given a rank one lower than the first boss. So, imagining the Clone is in Giant's Claw and the Toma's Pop comes from the Sunken Desert, then (if Boss Randomization isn't on) Rust Tyrano would be given rank 3, and Retinite would be given rank 2.
There are a few exceptions:
While Boss Scaling and Boss Randomization (
ro flag) can be simultaneously enabled, it is not recommended because the results are non-intuitive in versions up to 3.1.1. The randomizer applies Boss Scaling first, and then applies the modifications from Boss Randomization afterwards. This can result in scaled bosses in locations that do not hold progression.
As an example, suppose that the Chrono Trigger is placed in the Reptite Lair. The Boss Scaling flag will grant Nizbel greatly improved stats since his normal location now holds a rank 3 item. However, after this improvement, Boss Randomization has the chance to move Nizbel to a new location. For the sake of the example, let's say he is moved to the Cathedral. As outlined on the Boss Randomization page, Nizbel will be given Yakra's HP (plus a random factor), and his stats will be scaled down a bit due to the cathedral being a low tier spot. However, the scaling will be done from the starting point of Nizbel's greatly improved stats from Boss Scaling. The end result is a Nizbel with normal (for Boss Randomization) hp but significantly higher than normal stats.