The intention of this action is to cause Person B to react has though they were being attacked, and to protect or guard themselves, i.e. "Flinched". By the time they've done this, it has already been made clear that it was unnecessary to do so.
This act is intended to result in the embarrassment, shame or intimidation of Person B. It can be performed 1-on-1 between 2 people, where it is primarily used to intimidate Person B or to cause them to lose their confidence. Or it can be performed in front of a casual or intentional audience, where the goal is to embarrass Person B by tricking them into manifesting their fear or Person A.
It is considered very "macho" to be "Flinch Flexed" on (to be Person B) without flinching. Greater still to endure the maneuver without blinking or even moving your head (Total Badass).