I don’t think any red flag should ever be classified as a showstopper, except when it is clear and obvious misinformation. I believe red flags are additive. The biggest issue, in my opinion, is 1. not recognizing a red flag and being surprised later, and 2. not connecting the dots between different red flags.
Sometime the realization of outside influences, such as labor unions can stop the process. In fact, the only time I have seen us get deep into the process and stop was as a result of unresolved labor union issues.
I think in DD the goal is to look for things that can go wrong and have a significant effect on the company. For example a lawsuit that could ruin the companies reputation – this would probably be a showstopper if you felt the lawsuit had merit. Some of the risks can be mitigated – for example if a certain business is not wanted , it could be sold prior to the M&A.