Why exactly should releasing metal flakes into space generate heat? What about that makes sense?
I know it looks metallic but I would think it would have to be some kind of meta material married to the energy signature of the ship it's equipped to by the chaff launchers at launch time. Causing them to reflect the specific energy signature as the particles flip around in space. That's why it has no effect on targeting any other ship regardless of how nearby another ship is using chaff.
Still shouldn't generate heat. That's what a decoy would do. In a certain book i read, decoys were used that had mini FSD's that you could send off to another system and it would look like you jumped out while sitting in silent running waiting for someone to take the bait. Wouldn't be very useful for visual encounters. Also, wouldn't generate any more heat than a missile.