[waltjp]

I don't know of too many cases where a Referee would would abitrarily decide to wave off a flag without a good reason to do so. Each official on the field has an area of responsibility and they will flag any infractions in that area.

That being said, there are times when an official will throw a flag but may agree to pick up the flag if more information becomes available. One example may be when a downfield or wing officials throws a flag because he an offensive playing blocking downfield on the play. This may be waved off if the pass did not cross the line of scrimmage. The official was not wrong in throwing the flag because he can't determine where the pass was caught. It's usually the umpire who will supply this information.

Waving the flag off in this case is not an arbitrary decision by the referee. His decision is based on information provided by the crew.