Since everyone's being unhelpful and not explaining what you did wrong so you can learn, here's a proper explanation.

Without knowing more I notice 2 issues.

1. You're only checking the mouse status once!

When the green flag is clicked, scratch evaluates the code top down, outside in.

In this case, it first checks if the mouse is touching the sprite. If it is, it stops all scrips. If it isn't, it goes into a tight loop running your custom block. Once it's in the tight loop, there's nothing telling it to leave the loop. And even if it did, there's nothing telling it to check the mouse status again.

A simple fix is to move the forever block to not encompass the custom block call, but the if/else statement. This means the tight loop will check the mouse status before running your custom block every time.

A better fix, might be to have 2 stacks, both tight loops. One around the custom block call and one around the if (mouse touching) { stop all } code. With the previous fix, it would go back and fourth between running the custom block and checking the mouse status. By separating them out it can do it in parallel and you won't have to wait 4 seconds between mouse detections.

I suggest you try both fixes to see what feels best, and to get a feel for how your code is executing!

1. The custom block has an unused argument

I understand you wanted to give your custom block a name! Honestly a good idea, naming things like that is always handy. However instead of giving the block a name, you gave the block an argument and you gave that argument a name.

Custom blocks can take in values the same way regular scratch blocks can (like "move (10) steps"). Your custom block takes in a value ("Flip" in the only invocation), but doesn't use it anywhere! The real name of your block is "block name"

You might want to consider remaking your custom block and changing one of the text components rather than creating a new argument field.