Okay, so I just tested with a simple modset of my mods (incl. Reverse Factory) and Dectorio, and after hooking up an empty tank to the output of the reverse factory, they worked perfectly. I'm almost positive the issue is how slow the flare stacks work, compared to how quickly the recyclers produce water (with this specific item).
Recycling concrete grids produces 100 water per craft, and it crafts every 1 or 2 seconds. Even after hooking up an empty vanilla tank to the thing, after about 2 or 3 minutes of continuous recycling, it was completely filled. That's 24000 units of water, so it's no wonder the flare stacks were overloaded.
I don't think there's any way for me to fix this, aside from just changing the recipe itself to require less water, and produce less water. Or even just prevent the recycler from producing water at all. I mean, there's not usually any need for water anyways... maybe...