Fix for incorrect flagged email count in Catalina 10.15.7
If you have no flagged emails in Apple Mail but the flagged folder still shows a count of 1:
Try disabling and then re-enabling the mail account.
Mail > Preferences > Accounts
Under Account Information, uncheck and then recheck the 'Enable this account' box.
Flagging and unflagging all mailboxes, restarting in safe mode, checking the webmail for flagged items, rebuilding the mailboxes -- none of those worked for me.
Just disable and re-enable the mail account. Try that first before any of the harder things!
MacBook