Hi Tim,
The problem is with Composer, not you. Fortunately, though, there is a workaround for this bug (which is already on the fix-it list).
1. Click or click-drag to select the beamed notes you want to change to flags.
2. Click on the "Def" button (I know that seems odd - you'll just have to trust me here 
)
3. Now click the "Flag" button.
I tried this with your attached file, and it worked for all the incorrectly beamed notes.
ttfn,
Sherry