The foul was very similar to the flagrant that San Antonio's Manu Ginobili was called for on Memphis' Allen, except for the faking-an-injury part. On the play, LeBron elevated and Mahinmi made no play on the ball and just grabbed his arm and pulled him to the floor.
A Flagrant 1 is defined as "unnecessary contact committed by a player against an opponent." A Flagrant 2 includes "excessive" in the definition.
The league reviews all such incidents and reserves the right to reclassify fouls. What they're looking at is the severity of the contact, whether the player was making a "legitimate basketball play," meaning a legit effort to block a shot or steal the ball, whether the player "wound up" or "followed through" after contact, the potential for injury, the severity of any resulting injury and the outcome of the contact, meaning if it led to an altercation.