Drop from exhaustion, faint. For example, After running the marathon, be simply flaked out on the ground. This expression possibly is derived from a now obsolete meaning of flake, “to become flabby or fall in folds.” [Slang; c. 1940]
Lie down, go to sleep, as in Homeless persons flaked out in doorways. [Slang; early 1940s]
Lose one's nerve, as in Please don't flake out now. [Slang; 1950s]
Go crazy; also, cause someone to go crazy. For example, She just flaked out and we had to call an ambulance, or This project is flaking us out. The usages in def. 3 and 4 probably are derived from the adjective flaky, meaning “eccentric.” [c. 1970]
Die, as in He flaked out last night. [1960s]
Surprise, astonish, as in She said she'd just been made a partner, and that flaked me out. This usage appears to be a variant of freak out. [c. 1970]