This is a Firan-specific flag.
Any object set QUELL will disregard any WIZARD flag it has. That is, objects that do not have a WIZARD flag are not affected by the QUELL flag, and objects that do have a WIZARD flag act as if they do not have it. QUELL also prevents objects from inheriting WIZARD abilities from their owners.
The main purpose of this flag is to allow Wizards to temporarily become "mortal" (non-wizardly) for purposes of testing code or whatnot. With the QUELL flag @set, they are for all intents and purposes just like a non-wizard character. This allows a Wizard to turn their wizbit on and off, sorta.