Assuming that you have carburettors rather than fuel injection, this is nothing much to worry about. During hard acceleration and at high revs., the carbs. allowed as much fuel and air as possible into the engine; when you lifted off suddenly, the engine continued sucking lots of fuel in, which didn't burn in the engine (because the butterfly valves in the carbs. were closed by the throttle so didn't allow any air to mix with this fuel), which then got blown through and exited down the exhaust manifold. When these hot, fuel-rich unburnt waste gases met the oxygen in the silencer / muffler chamber and outside the tailpipe, the fuel ignited and caused the flames.
My BRA 289 (Rover 4.6 litre V8 with Holley carbs. on Offenhauser manifold) does this above 5500 rpm, and it is a great way of getting a tailgater off my @rse on the German autobahns
.... I love watching the front of the car behind dip down as it brakes hard to avoid being set alight by the flames from my twin rear-exit pipes !!
Another way of provoking such fireworks is to switch off your ignition for about 2 seconds at high revs., then turn it back on again (assuming that you have a separate ignition switch, not one integrated into the steering lock
) - this usually produces a much louder bang and larger flame !!
The only risk that I know of is that the explosion of unburnt fuel may blow out the baffle plates in your silencers / mufflers, unless they are good quality units (I destroyed a pair of Dynopack Glasspack mufflers within 1 year)
.