2014-07-18
Circle of Flame's ability triggers only if a creature without flying is declared as an attacker during the declare attackers step. If a creature with flying attacks you or a planeswalker you control and then loses flying, or if a creature without flying is put onto the battlefield attacking you or a planeswalker you control, the ability won't trigger.
2021-02-01
Circle of Flame is banned in Pauper (not just non-legal), due to a special case on MTGO: https://magic.wizards.com/en/articles/archive/news/january-21-2019-banned-and-restricted-announcement