I have read in several places over the years that Italian pilots were no less brave than Germans. I understand that their skill was impressive on an acrobatic level.
Most of their aircraft were significantly inferior to the allies in terms of overall performance. (Macchi Mc 200's and Fiat G.50's not to mention all the biplanes that were still seeing frontline service in 1942and 1943)
Also, their armament was generally quite pitiful. (Some Macchi Mc 202's just had two .50's and two 7.7mm guns)
In 1943, they began to churn out some truly impressive aircraft (Series 5 fighters) that on a dogfighting level were superior to anything the allies had with the possible exception of the latest model Spitfires. Even then, they were probably equals.
I heve never heard of Swordfish pilots "scaring away" Italian fighter pilots by throwing flares. Frankly, it sounds like a bunch of BS to me but that's just one man's opinion.
Here is a quote from George Buerling from a book by Miles Constable entitled "George Beurling, Canadian Ace" With 32 confirmed planes shot down, George Beurling was one of the top Allied aces of WWII.
"The Eyeties are comparatively easy to shoot down. Oh, they're brave enough. In fact, I think the Eyeties have more courage than the Germans, but their tactics aren't so good. They are very good gliders, but they try to do clever acrobatics and looping. But they will stick with it even if things are going against them, whereas the Jerries will run."