I don't think you've given us enough info to make an informed comment. Re-flanging to me implies that the system is composed of multiple bits that are bolted together somewhere. Hence the flanges. Cutting out the flange and putting in a slip joint will turn a multiple piece system into one with one less bit.
Does it matter? Hard to say without knowing more about the system. It might be the case that welding the slip joint in makes it impossible to replace other intermediate bits of the system like silencer boxes if as and when they fail, making future repairs more expensive. Presumably as one part of the system has rusted through, there will be other bits that are less than pristine.
How much is the difference between the two quotes? Me, I'd always go for the 'make it how it's supposed to be' option, but then again if the car was a snotter and I just wanted to keep it going at minimum cost, I might go for the resleeve.