Confirmed that the bug is fixed in the 4.10 kernel series.

Further confirmed that this is down to the i915.enable_psr parameter:

Linux 4.8 with no command line => flickering (enable_psr defaults to on)
Linux 4.8 with i915.enable_psr=0 => no flickering
Linux 4.10 with no command line => no flickering (enable_psr defaults to off)
Linux 4.10 with i915.enable_psr=1 => flickering


** Package changed: nvidia-graphics-drivers (Ubuntu) => linux (Ubuntu)

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https://bugs.launchpad.net/bugs/1663989

Title:
  Screen flickering

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