No red flags from what I could see. Red flags are for when someone betrays the Social Contract at the table. Every table's Social Contract (even every session's) is different in ways that are both emotional and invisible (which is why we often fight so much when discussing how role-playing ought to be or ought not to be). But you played fair as the table understood fair, and a good time was had by the players even thought they took a loss.

I had a session of an old Rifts game years and years ago where the party was trying to infiltrate the headquarters of a powerful organization. They knew, IC, that the 'Council' weren't home and they knew, IC, that the non-Council security guy was home. They reasoned, OC, that this guy couldn't possibly be a threat.

They were very, very wrong.

In a single round one of them was dead and two others had basically no armour left. There was fear in their eyes and they RAN AWAY.

Glorious.