I've filed a detailed bug report about this, but for folks who run into the same thing, here are the symptoms and a (tedious) workaround:
Affected SCMs: Perforce, and possibly others. Note that my company does NOT bind Flare directly to Perforce, because performance of bound projects is terribad.
Flare version: 11.0.1 (the first patch for Flare 11 that occurred just a few days ago at this datestamp)
Symptoms (I'll use Perforce terminology):
1. Make edits to the default Synonyms.mcsyns file in your mainline stream (branch). You can build HTML5 targets just fine, open the synonym file just fine, and so on.
2. Now either integrate (merge or copy) changes from the mainline version of the file into some child streams, or create entirely new child streams (branch) from the mainline stream. You will see the file being correctly included in the integration/branch changelists, and Perforce will indicate no issues with the file.
3. After such branching/integration, attempt to build an HTML5 TopNav target in the child streams (My guess is that you'll see the same error with non-TopNav targets too). You'll get a critical build error complaining about a "root" object in the project being corrupted. Also try to open the Synonyms.mcsyns file inside of the affected Flare project. You'll get an error that the file is corrupted.
4. Open the "bad" synonyms file in any text editor. You'll see that it's filled with a combination of English and Chinese text, unlike the "good" version in your mainline stream, which is filled only with English text.
Workaround
To workaround this issue, you must unfortunately use Windows Explorer to manually copy-paste a "good" version of the file from a local workspace folder for the mainline stream into the local workspace folders of all the affected child streams. Yes, every individual author has to do this for their own local workspaces for each stream. It's a serious PITA: after you branch any new child development streams, no builds will work for any one author until they remember to do this manual overwrite.
I've never seen _any_ behavior like this before in Flare. I've done literally hundreds of integrations and branches starting with version 10 and never had any issue like this with any Flare files. It's very disconcerting.