What you may have saw, the initial "flashing" of a Dream FP, was to the first CM watching the line. When we were there, and had Dream FP, we would show the FP to the first CM, walk up the FP line, and about half way up there would be another CM who would either take the regular FP or the dream FP tab. We would then continue through the line until boarding the ride.
They also told us, that the CM had to be the one to remove the tab. A guest could not just hand the CM a tab, it still had to be attached when in line. I guess they didn't want someone taking advantage of a lost tab accidentally broken off and lost on the ground?
HTH!