They certainly list flaws. I have several PF certs that list flaws.
Depending on what area you are collecting (for example, modern graded material) in all likelihood stamps with any flaws would never be submitted to begin with.
If you look at PF certs for 19th century material, you'll see plenty with flaws listed.
Don't forget, you can always search (a subset of) existing PF certs at
www.pfsearch.org