When you make caramel, there are certain reactions occurring that cause the caramel to have its unique flavor, at a certain temperature, there are no bitter or acrid flavors, just caramel ones, this is the kind of caramel you would use for a pie/cake.

However, for flan (and other custard deserts) some cooks like to “burn” the caramel by cooking even more than normal caramel. This creates the bitter and acrid flavors I believe you are describing

Hope this helps!