I have been struggling with this all day. I was about to go back to the apple store just to see how to use this flap.
You have to tuck it in tight. The only instructions are on the clear plastic wrap that is on the cover when you take it out of its box.
I don't have one yet but was concerned about it for a while. I have been asking people to confirm this issue.
Mine has been in the case all day and it is at 2% battery as I type this so it has gotten a ton of use as I try out all the things the iPad can do. My MacBook would be cooking my thighs at the moment but the iPad is just barely warm. And I'm typing this response with the iPad too. And when I say barely warm I mean I would recommend it to you a thousand times over. I'll shoot my first born if an iPad died due to overheating cause of the case cause I don't see that happening. I don't even feel it I only felt it cause I checked it out cause of your question.
I put it in the box and use it for 30 munites and it was warm. I was worried because heat can shorten battery life. it is cold while holding it though.i dont have the case yet but I played around with it for an hour straight and it didnt get warm so I imagine it wouldnt get warm in the case.