Luxpro psd111 thermostat shows snowflake (sometimes blinks), outdoor fan works, but no cool air comes out inside- no air flow at all. Is it the thermostat or an a/c unit malfunction?

the snowflake means you are on cooling, blinking typically means a time delay.

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The snow flake indicates that the mode is set for cooling, not hearing our both heating and cooling.
There should be two temperatures given by the thermostat, one is the actual room temperature and the other is the temperature setting. The room temperature reading only changes with room temperature change. The thermostat setting temperature changes when the up or down button is pressed.
If your room temperature, say it it's 80° and the temperature is set lower than 80° with a snowflake, the fan should run and start blowing cool/cold air. If you system does not do this, then there is a problem. The problem can be the fan housing cover is not making contact due to the cover not installed properly, nothing will run in this case, no fan. It can be there is no power delivered to the indoor fan, or to the outdoor fan, both these fans must run during thermostat calling for cooling.
The thermostat is not something to be reset as you asked but rather, you check that both fans run and that the outdoor fan makes compressor noise.
Come back with your findings or call a service person. One last try is to shut power to both indoor and outdoor parts of the system and then restore power in attempts to reset the unit or power circuit breakers

Usually blinking means you are in a time delay. Obviously not for three hours but... Turn fan to on position and verify your indoor fan is working. If so check outdoor unit and see if it's running. If no indoor fan turn breaker off, and inside the tstat put the red and green wires together and turn breaker back on. If indoor fan runs you have a bad tstat. Good luck!!

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shows that the setting [temperature] is set to come on when a temperature inside gets below 2 degrees or zero

On the Luxpro PSD111, Farenheit or Celcius are selected using the Jumper Switch J2 on the rear of the unit's circuit board:
Open = Celcius
Closed = Farenheit

It probably has stopped outdoor unit and the blinking is to be done when working anamoni.afto heating and not to bring in cold air flashes the LIGHT as long heated air into the condenser.

If the thermostat has a blinking snowflake then it is in time delay mode which sometime can take between 5 to 7 minutes before it will turn the AC and Fan On......Then it will go to a solid snowflake.
When you turned it to fan On it starts the Fan right away..... After the snow flake has went to solid check to see if the fan is running and then look outside to see if the Fan Blade is turning on the AC..... The fan blade comes on the same time as the compressor does. Then with the fan running hold your hand above the air stream above the AC and if you can noticeablely feel warm to hot air comeing out the Top then the compressor is running also. If the outside unit is not running I would check to make sure the Main Breakers are turned ON.... After the AC has ran for a few minutes feel the copper lines that go into the house the smaller line should feel warm to hot and the bigger lines with insulation on it should feel cool to cold and sweating with beads of moisture on it..... That is a quick test to see if the unit is working properly.....If you have a Thermentor and can Check the Temperature of the Return Air and the Supply Air .. You should have about 20 Degree F Between the Supply and Return........ 75* Return - 55* Supply would Equal 20* TD Across the Coil......
That is about all you can do to check on your own....... If the compressor is not coming on or the lines are not the temperature difference then you will need to get professional help for your Air Conditioning System..... Goood Luck Hope this Helps.........

check power to outside unit, check if it has a fused disconnect, if you have power and no blown fuses it could be a blown capicator that starts the fan and compressor...............

When the snowflake is blinking the thermostat in in a delay mode designed to protect your compressor. If it does not stop blinking in 15min the stat is bad otherwise something is wrong with the AC

check the refrigerant it might have 2 be recharged