Why do you need a flag at all? Simply support real(kind=16).
Some people have codes, in standard Fortran, that autodetect the floating-point mode with the largest precision and use that. If we introduce soft-float modes, they might be annoyed as everything slows down immensely... and they have no way to detect "the most precise hardware-supported floating-point type".
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On the other hand, I suppose that most people actually hardcode kind numbers rather than use carefully crafted selected_real_kind calls, so it may not be such a big deal.