If I’m understanding you correctly, you want to use the “hard light” flash as a transition and have it fade out at the same time.
Since you can’t layer FX together, this has to be a two track workaround.
Apply a standard fade (of the desired lenght to the clip.
Drag the “hard light” flash over top of the fade.
To have it fade out, insert a new video track above this, drop a Solid Color Black on it and set it to the same length as the fade you just did.
To have the flash FX fade out, do a fade in on the black clip.