I threw a lit flare on the ground on an asphalt street and it just disappeared and fell into nothingness. I tested it twice so far and each time first threw it at a normal angle away from me (lit), then picked it up, aimed at the ground and gave it a short tap throw. It just falls straight through the ground and disappears.
First time I did this the server crashed, second time it did not. So probably a coincidence.
EDIT: After the first server crash I respawned with my flare still intact and in hand. After the second server crash the same, even thought between throwing the flare and the server crashing I fought a zombie and there was a good 3 minutes delay.
Happened on DE-01