I'm pretty sure this is normal. And IIRC it's cause, is injector over-run.
There is a small delay between when you let off the gas, and when the injectors and spark plugs stop firing. I believe this is implemented from the factory to keep there from being a sudden slamming deceleration sensation when you lift off the throttle.
Since the throttle plate is closed, and very little air is moving through the system, the combustion is delayed and winds up moving far enough back in the exhaust system to see flames (on de-catted, high flow exhausts).
This has nothing to do with timing advance or the air fuel ratio you run while WOT. It is common on WRX/STI's and happens to me all the time.
Rally cars sometimes incorporate injector overrun to function as anti-lag. (there are other methods of antilag as well). When they lift off the throttle, the injectors and sparkplugs continue to fire for quite a while, and the expanding fireballs will keep the turbo spinning.
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