We've had these for ages. Everybody knows what they mean. A flashing yellow means that specific turns in crossing aren't indicated with lights and drivers revert back to generic right-of-way rules and using common sense caution. Every traffic light has the capacity to switch to flashing yellow triggered by circumstances, usually a system malfunction, or because it's night time. A lot of cities here switch traffic lights to blinking yellow at night when there is less traffic, so people don't have to sit in red lights for no reason. It's also more convenient in some intersections because you can turn left (if there is just one lane to cross) without having to wait for a specific green light.
On the other hand, you can't get a driver's license here without enrolling in a mandatory two-part driving program (one part for summer driving, one for winter conditions) which starts at $1,500. It's very thorough so you learn that there's more to traffic than just the three lights.
I can see why it would be confusing when it is first introduced, because there is no existing system for educating current drivers on new rules, but it's hardly a disaster waiting to happen, provided that people look at the road and not their cell phones.