I don't think Kramer is a good example of this. The Simpsons characters, and I suppose most Friends ones as well, gained depth (or at least the audience's affection) over the course of several seasons, whereas Seinfeld stuck to its original formula of, "No hugging, no learning." Kramer was never supposed to take on interesting dimensions like the Flanders of the nineties did.
Ross also became more and more neurotic.
So why didn't you call it Joey Effect? Did Kramer also go through the exaggeration process throughout the series?
I used to call it the "Kramer Effect", much like you, without knowing it was called Flanderization and was using it in the early 2000s to describe my displeasure with the character Joey from Friends.
Joey went from kind of low intellect to full retard by the end of the show and very inexplicably.