According to their research, there is no 50% rule as long as the party claiming the child is a parent...however even then, under the tiebreaker rules the two parents combined must provide more than 50% of the child's support.
If there is a duplicate claim between a parent and a non-parent, the parent wins unless the non-parent can prove that they provided more than 50% of the child's support.
I would agree with you that in the case of a child being the qualified child for two different people, (outside of support) they may elect who claims the child. An example of that would be a parent and grandparents sharing a household. However, if they do not agree, then the tiebreaker rules go into effect, and then then whoever provides 50% of the child's support IS a determining factor.
And then of course there is the whole rule about the child not providing more than 50% of their own support.
The bottom line for this OP however is the flexible spending account. The OP simply cannot agree to allow the grandparents to claim the child.