hook_flag_options_alter() not working

Here's my symptoms.

In flag_abuse I'm trying to alter the default flag options. I can put a dsm() at the end of my hook implementation and I'm returned the expected alterations. But if I put:

drupal_alter('flag_options', $this, $options);
dsm($options);

I am presented with the original $options array, completely unaltered.

Following is the code that should work:

/**
 * Implementation of hook_flag_options_alter().
 */
function flag_abuse_flag_options_alter($flag, &$options) {
  // $options['events'][] = 'reset'; //only able to do this after the flag_events patch...
  $options += array(
    'reset_short' => 'Reset flags',
    'reset_long' => 'Reset all flags on this '. $flag->content_type,
    'reset_message' => 'Flags reset.',
  );
  $options['roles'] += array('reset' => array(DRUPAL_AUTHENTICATED_RID));
}