I cannot reproduce it here, but probably because you used a permission-restricted texture (no-mod or no-tfr)...
The latest releases include a fix by LL to forbid adding permission-restricted texture to a HUD, the reason being that to abide by the permission, the texture must be copied into the prim to which face it is added, and you cannot do this with an attached object (which exists both as an inventory object and an in-world object; only the second would see its own inventory updated).
I will see about the flickering issue though, since this should not happen... Tried it here, and no, it does not flicker either...