I share your view that this is out of line. AA really shouldn't call a ticket "fully flexible" if it has a penalty to refund, because one important aspect of flexibility is the right to refund without restriction or penalty.

This thread began with the observation, right in its title, that litigation could be appropriate about this problem. I think that observation was correct. A necessary first step is someone who was affected (who personally incurred such a loss) wanting to serve as class representative. Centurion, it sounds like that problem hasn't happened to you, and I can't tell whether you'd want to serve in this capacity if it did happen to you. As a practical matter, AA is likely to continue this practice unless they're sued, or unless a regulator tells AA to stop. It's up to all of us to build the world we want, not just accept things as they are.