"Erase and download necessary segments only" flash option still erases part of flash that it should not.

To see the problem, program the device with this setting disabled, then dump the Flash to a file and repeat with this setting enabled. If you then compare the Flash contents you will see that the “Erase and download necessary segments only” does indeed erase parts of flash that it did not need to. The erase behavior is odd in that it will only impact parts of the flash.