Since the muzzle flash is black and white you could add a Sony Mask Generator FX to the event and the Luminance setting will key out the black leaving only the white muzzle flash.
As for erasing parts of the flash, that will be very difficult in Movie Studio because I don’t believe it has the Mask capability in Pan/Crop that Vegas Pro has. Normally I would go into Pan/Crop and use the Mask tool for this. You really need a tool that has masking capabilities. Without it, you would have to manually create a black and white mask in a tool like Photoshop and then keyframe the movement of the mask to match the subjects movement. Then composite that wil the original footage.
~jr
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