All flocking will settle. How much and how fast depends on how tightly it's flocked, and what it's flocked with. As a general rule, I find usually they need to be touched up somewhere around 2-3 months, as they break in to the horse's back. After that it really depends--I've had some be fine for a year, others need further attention at six months. Not really surprising that the higher-end saddles are flocked with better wool, which holds up longer. Fitter who works on my endurance saddle wants to completely reflock it next year, replacing the standard grade of wool with premium long-fiber wool that gives more cushion to the back.

You definitely want a new flocked saddle to be a little bit "too high", otherwise it'll be too flat very soon. But it should "fit" correctly otherwise. Settling of the flocking will not solve the problem if the tree doesn't fit or the panels are the wrong shape for the horse's back.