Accepting and appreciating our flaws is healthy for sure.
IMO the problem lies when we deny reality, and maybe we idealize some flaw, telling ourselves it's great instead than a flaw. I'm thinking about people saying that a 350 lbs person is BEAUTIFUL!... instead of having the honesty to admit that being 350 lbs is morbidly obese and clearly unhealthy - not to mention it looks unpleasant to most people (*). Or drinking A LOT and telling myself it’s fine because I like to have fun.
That's not embracing flaws; that's fooling ourselves into fairy-tales and child-like thinking.
(*) BTW I like curves and even chubby women, so this comment has nothing to do with my personal taste nor is an attack on fat people; it’s about pushing idealistic and “woke” mindsets while denying objective facts.