they flash when they get excited.
bascially, a harem of females, another male, other wrasse, other fish, reflection etc will naturally excite it. and thus, invoke flashing behaviour. It's hard to say what will invoke flashing. but the best bet will be other wrasses and females. other wrasses in the same genus is even better. getting other flasher wrasses will also cause flashing. defending territories and chasing will also produce results
when flashing, the wrasse will swim at super high speed so a hood or cover is needed to prevent jumping.
Exquisite fairy wrasse is a highly variable species. there are 5 known variants of exquisite wrasse ranging from indonesia, australia, fiji, vanuatu etc. all 5 variants from different locations will exhibit different colouration.
my personal favourite will be the ones coming out of africa and maldives. they exhibit the most amount of pink on their face and when kept till alpha/terminal male, the dorsal fins will turn yellow.
specimens from vanuatu will have very little to no pink on their face and the body will be predominantly green. interestingly, exquisite wrasses from vanuatu may occasionally have bright yellow dorsal fins. this is only seen in large alpha males.
take a look at the photo below from liveaquaria. the vanuatu one looks spectacular, but it's almost impossible to obtain one like that. the colours are only from terminal males.
exquisite wrasses from maldives and africa (pink faced ones) will not fade colour in captivity. specimens from vanuatu and especially indonesia (from my experience), will fade to a dull green. You can check with bro LaW regarding exquisite from indonesia. I was with him at CF and found a gorgeous exquisite with a bright yellow saddle on it's green body. the colour faded to dark green eventually
so choose your wrasses wisely