1. Your first event is not picking any Flak objects in the conditions. All Flak objects will be destroyed if any of them are within 150 of rocket.
2. In your loop, there are no Flaks to spawn shrapnel from because they all got destroyed in the previous event. In the same vein, you cannot set the properties of any shrapnel objects because none were created.
Here's the thing, the Flak Objects are passing straight through the rocket without being destroyed.
Furthermore, I've decided to try to tackle this issue in a different way: By having the Flak carry an instance variable that is the distance between the flak gun and the rocket which was targeted at the moment of firing. Then, when the flak has travelled that distance, it will explode.
I am, however, having some problems with getting the x and y of the rocket targeted at the moment of firing. How do I go about that?