It is such a pain. I had the same problem with the Microsoft docking station, (the one I used with my surface 3) and a HP docking station. However, oddly, a toshiba docking station worked fine. The difference (I think) is that the toshiba uses a USB connector to link the Surface 7 to the dock, not the fancy microsoft all on one power connector.
So the toshiba docket is great, no flickering BUT....it does not power the Surface. So I also connected the microsoft surface dock to the Surface to give it power. The microsoft dock had no external monitors attached. This works fine. The downside is that its more cables traipsing across the desk, needing the second docketing station (I just happened to have the toshiba handy) and just not simple to manage.
I see Microsoft advertisements touting how fabulous their solution is. Really??? :)