With a larger pseudo time step of 0.08 (largest one possible without divergence in the beginning) the oscillations are clearly visible in the lift coefficient, and in the pressure at a point close to the separation area. It seems like the flow over the flap alternates between being attached and separated. But only close to the wall, not in the middle of the wing.

Is the time step still too small? Should I try it with the CFL condition instead?

I can see now what is going on at the wall. However, I still don't understand why it is happening. And moreover, why this only happens with the free slip wall and not with a no slip wall. Any thoughts?

Thank you