Comment 2 for bug 1203896

The IMAP standard (RFC 3501) says:

   59) It is not an error for the client to store a flag that is not in
   the PERMANENTFLAGS list; however, the server will either ignore the
   change or make the change in the session only.

So, unfortunately, your Exchange server is not adhering to the standard.
Please do complain to whoever is running your Exchange server.

All that I can do is to make VM resilient so that it carries on regardless
of the error messages. So, what happens after these error messages arise?
Does VM break in some way?