A red flag of what?

Defaulting on their credit card bill. Or the account ends up having been started by an identity fraudster. Which also ends in default.

That seems backward. The people I’ve known that spend a lot of money on adult entertainment are exactly the group that pays their bills.

This. I dont know who do you need to be in order to pay for the porn that you can pirate for free. In case of games or music or movies there is collecting and convinience, but porn is pretty much opposite.

But at the same time chance of "oops it's not mine" charbacks likely much higher compared to other spending.

Then why would they want to stop getting these red flags?

Red flag for what?

A regular purchaser of adult entertainment almost certainly has enough cash flow to pay their bills. And they'll have a hard time claiming it's not them when it matches their previous activity. Having an interest in sex doesn't in the slightest suggest a person is bad--if anything, the apparent lack of interest would be more worrisome. (Not that purchase history can be used to discern this.) Some of the ones who don't are asexuals, but some are those who are repressing their sexuality--and that's more likely to show up in unacceptable ways.

A first time purchaser of adult entertainment is another matter--that's going to have a lot of spouse-found-out chargebacks.