Most times, whenever you have an expression with nested contents, you will end up using a pyparsing Forward expression. A Forward allows you to refer to an expression that is not yet fully defined - it is a forward declaration. In your parser, the -flag args... form can itself contain flag nested within {}'s. Once the contents can be specified, then the "assignment" can be done using the <<= operator.
I also strongly recommend writing a short design of the parser before you begin actually writing any code (do this no matter what parsing library you plan on using). In parsing, a BNF (Backus-Naur Form) is the typical format to use. It does not have to be ultra-rigorous, but enough detail so that you can manually work through it to make sure you have the pieces right, and there are no ambiguities. Also good to write out a few example strings that you expect the parser to be able to process.
The following annotated code shows the BNF I wrote out for your problem, and the implementation of it into a pyparsing parser.
"""
BNF
flag_name := '-' alphanumeric...
flag_arg_word := alphanumeric...
flag_arg := flag_arg_word | '{' flag_expr... '}'
flag_expr := flag_name [flag_arg...]
"""
import pyparsing as pp
# define punctuation
LBRACE, RBRACE = map(pp.Suppress, "{}")
# recursive parser requires a forward declaraction
flag_expr = pp.Forward()
# implement BNF definitions
flag_name = pp.Word("-", pp.alphanums + "_")
flag_arg_word = pp.Word(pp.alphas, pp.alphanums + "_")
flag_arg = flag_arg_word | (LBRACE + flag_expr[...] + RBRACE)
# use '<<=' operator to define recursive expression
flag_expr <<= pp.Group(flag_name + pp.Group(flag_arg[...]))
# a command is 0 or more flag_exprs
cmd_expr = flag_expr[...]
# test it out
cmd = "-flag1 -flag2 object2 { -nested_flag1 nested_obj1 -nested_flag2 }"
parsed = cmd_expr.parseString(cmd)
# convert to a list and show with pprint
from pprint import pprint
pprint(parsed.asList(), width=12)
# runTests is very useful for running several test strings through a parser
cmd_expr.runTests("""\
-flag1 -flag2 object2 { -nested_flag1 nested_obj1 -nested_flag2 }
""")