Why does dementia patient have flashes of anger?

Could be because thinking (all thinking) requires effort and from him it requires considerable effort, and this makes him uncomfortable.

Could be loss of behavioural filters.

How do you respond when he does this?

I think this can be very common. Try not to take is personally and just try to stay calm and get the convo back on track. Good luck!

There are many reasons.
He may just be angry at the situation.
Anger may cover up the fact that he does not understand the question.
Before you ask a question start with a few words first. For example you may say "Do you want to go to the store" He may only process part of the question because he was not "tuned in" So say .."Honey, I was thinking about going to the store Do you want to go to the store" That gives him a moment to get his mind where you are before you ask the question.
I have read it may take someone with dementia 45 seconds to process what has been said and then answer. (I don't know about you but in 45 seconds I am on to another topic!) So give him time to process.
Also try lowering the pitch of your voice. Higher pitched voices are more difficult to hear. So lower the pitch, and speak a bit slower and enunciate well.