So, as far as a real-world example goes, if we're playing exactly 10 in a game, and the DP gets on in her first 2 at-bats and the FLEX runs for her both times, then the (former) FLEX would bat for the remainder of the game, unless subbed out for a bench player. The starting DP - having already used her 1 re-entry - would *not* become an eligible substitute.
If you are playing with exactly 10 and using the DP/Flex, you have no bench players to use as a sub. Otherwise what you have said is true. After running for the DP the second time, the player in the DP position has used up their re-entry and is no longer eligible to play. The lineup has dropped to 9 and the Flex would bat in the DP position for the rest of the game.