So this was discussed a little while ago but the thread has since been closed.
Anyway, I got the effects using $flags working in empty models. The effects are pretty basic - just streams of little coloured circles, but it works.

Source for env_projectile entity to test it: https://github.com/tschumann/basis/blob/master/dlls/mod/modeffects.cpp
Source for models with flags set: https://github.com/tschumann/basis/tree/master/modelsrc
Source for map with some entities to test the models: https://github.com/tschumann/basis/blob/master/mapsrc/env_projectile.map