Hmm. It totally makes sense for a real amiga because anything interlaced would have to flicker, specially if PAL, and I suppose what's happenning here is that Workbench is displaying the progressive DCTelnet screen interlacedly so to make it suitable for it's screenmode, but nevermind, the whole screen stops flickering as you untick the "remove interlace artifacts" option, though the artifacts will be back on the Workbench, which was originally interlaced.
Hadn't seen WinUAE screen flicker in centuries, though
Edit: I tried changing DCTelnet's screenmode to highres-laced so the two screens would match, possibly avoiding a conflict, but turns out the flickering will still occur. Unticking the "remove interlace artifacts" option kills the flickering as efficiently as in the first example, but also introduces combing in DCTelnet, so now the whole screen gets combing.