I don't have a lot of Caravan time, but I had that same question in training and the way it was explained made sense. It's best to consider engine failures, roll-backs, and flameouts, as well as your response, in practical scenario-based contexts to ensure the best diagnosis of the cause based on your flight regime as well as the indications.
SCENARIO 1: You just flew through heavy precipitation, or maybe hit turbulence at high AOA that interrupted airflow and caused a compressor stall. If your engine subsequently rolls back, you ought to be thinking flameout first, and should try to catch it quick before Ng decays below 50%. So, Power to idle to slow fuel flow, and get the ignition switch on right away! (Give yourself a shot at a quick relight without the inflight checklist.) If you miss that and the engine seems to be running all the way down, secure the fuel condition lever some time below 50% Ng, and if you have time after setting your glide speed and looking for a landing site, be prepared to try an airstart.
SCENARIO 2: If the engine just rolls back to idle for no apparent reason you ought to suspect the FCU and engage the EPL (after power to idle...) to regain control. It may be that you misdiagnosed #1, so in reality one procedure could blend into another.
SCENARIO 3: This is the mechanical engine failure. You should really only go straight to this one if it is fairly obvious that it isn't # 1 or 2, because something a bit more dramatic happened. (I.e. there's no good reason to suspect a mere flameout due to heavy rain or maneuvering, and RPM didn't stop at idle with other conditions indicating normal.) Something bad has probably happened - maybe there was a loud bang indicating a hard internal failure of some sort, vibration, oil streaking from the cowling, or you just sucked a 25 lb goose down the intake. You don't want to risk a fire or further damage by leaving it running or attempting a relight if something major has broken, so set your speed to best glide and just shut it down (IDLE, FEATHER, CUT-OFF) then look for a place to land.