All-optical flip-flop has been demonstrated experimentally based on our optical bistable hybrid square-rectangular lasers. In this paper, dual-mode rate equations are utilized for studying the optical bistability in the two-section hybrid-coupled semiconductor laser. A phenomenological gain spectrum model is constructed for considering the mode competition in gain section and saturable absorption effect in the absorptive section in a wide wavelength range. The mechanisms of the optical bistability are verified in the aspect of the distribution of carriers and photons in the two-section hybrid-coupled cavity. In addition, we find that with the adjustment of the device parameters, both of the width and biasing current for achieving the bistability can be tuned for a wide range. Furthermore, a dynamic response of all-optical flip-flop is simulated, using a pair of set/reset optical triggering pulses, in order to figure out the laws for faster transition time with lower power consumption.