How do I know if my BLTouch is faulty or firmware is faulty?
Try calibrating your Z offset
Based on this answer it sounds like the flashing red means there isn't enough clearance between your bed and your probe for it to operate.
You might try raising your Z axis up a bit to let the probe achieve the minimum clearance necessary for deploying the probe. My guess is that your Z-offset isn't quite right and it isn't raising up enough to allow that minimum clearance.
I recommend calibrating your Z offset and see if that resolves the issue.