Your flag was marked as disputed because the low quality review item that was created by your flag had a "Looks OK" outcome after two reviewers chose "Looks OK." This disputes Not An Answer and Very Low Quality flags raised on the related post.
As a note, disputed flags are neither good nor bad. They have no negative connotations on your ability to flag, unlike a sizable amount of declined flags will have.
As you note, the answer does have value. Telling the question author that what they're doing is inadvisable is definitely worth doing in this situation. The length of the post is a bit long for a comment, but a diamond moderator can edit the post to be a suitable size and convert it into a comment, deleting it in the process while still retaining the helpful information.
What you should do is flag the post with the reason "In need of moderator intervention" and explain that, while the answer doesn't actually answer the question, it has value in the form of a comment, and that the author of that answer doesn't yet have the ability to leave comments. Then, ask that the answer be converted to a comment. If the moderator that reviews your flag agrees with you, they'll perform the related action and dismiss your flag as "helpful."
In the meantime, I have flagged the related answer and requested exactly that. Here's the content of my flag message:
This answer doesn't actually answer the question, even partially. The author, as they note, does not actually have the ability to post comments (and would have if they did). Despite this answer not answering the question, it has a sizable amount of value and I feel it should be kept around. Could you convert this answer to a comment, editing it to trim down the length if necessary to fit the comment length limit?
Converting answers to comments should only really be done in cases like this, where the answer has value... Just not as an actual answer to the question. In all other cases (the answer has no value, does not answer the question, etc.) it should just be deleted (via review or delete-votes).
Update: The answer has been converted into a comment. It's a bit mangled at the end, but the core of the message is still there.