The no fly setting on regions currently has an exploit where a land owner can set no fly on the land, but viewers can still enable flying for users. I believe this was a long standing issue where override fly permissions was removed from the LL viewer but never removed from the server code, so viewers just left it in.
I've been trying to find the exact patch notes for the viewer when it was remove but unable to find it right now. The issue still stands of the server not respecting land permissions set by land owners.