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Flagging discussion category issue

I'm on Version 2.0.18.4, a new install with an imported database from my old installation.
I've enabled the Flagging plugin and I'd like it to create a discussion in the Moderators category when something is flagged. If I check the 'create discussions' box, that works fine. If I tell it to use the Moderators category, that particular setting doesn't seem to save. When I check, its still using General.
Any ideas how to resolve this? I'd like flags to be private.
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