I've been attempting to figure that out myself. I found it in the script dump that ZeaLitY posted just a short while ago; it stands alongside a host of other character specific lines, where each of them says their own space about the Flame. I would have dismissed this to be something cut from the actual game, but it sparked some memory, and I think I've seen it in the game before, once. ZeaLitY, it seems, also knows this, so plainly it does occur at some point... but on replaying I was unable to see it. Moreover, I've only every heard this one, Starky's, a character I rarely used, which was odd. I've never heard any of the others say anything akin to what they are meant to (mostly, it seems, the Flame revealing and/or tempting them with things.)
But sufficed to say, both I and ZeaLitY remember it as having been said, so it likely is at some point or another, even though I cannot remember exactly how to get it (I think it likely to be atop Terra Tower, even though a replay did not yield the lines: it is in the same 'room' as all the other dialogue from that segment.)
Anyway, any other ideas on what this might mean? Just to add to what I said before, unless FATE was purposefully trying at deception, her words must be taken as more true even than Lucca's in Chrono Trigger: FATE is corrupted by Lavos, thus presumably has greater knowledge of its history and true being even than that fabled inventor. In this I am referring specifically to what she says regarding the Flame, that it is the essence of what fell from the heavens in prehistoric times. Thus the Flame is almost without doubt the essence of Lavos (save for two cases: FATE does not know Lavos, which would be strange considering her corruption and essential control by that being; FATE was purposely attempting to deceive. Though for the latter, it does not seem to me that there is either reason or purpose in such a thing in the hall of the Flame in Chronopolis.)
The other two lines pertaining to it are of Starky and Lucca. These two essentially seem to contradict (though I suppose resolution could in some measure be possible.) Starky's is posted above, and speaks of the Flame, thus Lavos, as mirroring and echoing, even containing, the Beginning of the universe. To counter this is Lucca's statement of its parasitical existance, and the insinuation through this that it is not sentient. That last, however, I have before thrown into question, with Lavos' apparent high technology and bio-engineering capabilities, both of which hint at not only sentience, but extreme intelligence. I suppose this means that Lucca is not claiming Lavos to be an unfeeling parasite, merely that this is its way of conquest. Different than any earthly lord would do, for certain, but Lavos is not of the earth, thus it would be odd if he follows the same ways of war and conquest as humanity would. After all, it is ancient and, seemingly, immortal in the sense that it does not die naturally (or at least has a span of life exceeding 100 million years) - I think that somewhere, in fact, Lavos is called the Infamous Immortal. But essentially, Lucca does not see Lavos as much more than a conquerer and enemy, whereas Starky sees echoes of the very origin of the universe in this thing. It might be assumed that, for all her technical aptitude, Starky has a far greater understanding of the universe and of science than even Lucca does, so is it he we should believe. Would he know and understand such a thing as the Flame as clearly as he seems to?
This leads to the question: what then, is this thing? I have always held Lavos to be something of a lord: mighty, terrible, and dark. A dark Lord of an older fantasy vein. Is not the Flame then his Ring? But apart from such things of my own seeing, it seems now apparent that Lavos may be far more terrible than a parasite, and that even before his change into the Time Devourer, was mighty beyond measure. He has some darker purpose or origin, perhaps, than has yet been revealed. Maybe a terror born into the universe at the beginning, a nightmare of a fledgling world that has haunted it since its inception. Or maybe yet an echo of the chaos of the beginning, a Tiamat who has not yet had a Marduk to vanquish it fully. And, it seems, destined to be the End of all things, if Starky is to be believed. Is he then perhaps evil itself? All the more reason to look to Chrono Brake with anticipation, I suppose.
So, what do the masters of the Compendium say to this? Has this ever been explored?