Even without the A/C running (it is not connected to the regulator actually) it does buzz from time to time.
That's just part and parcel of using a trasformer, you'll get a hum, or buzz, due to the 50Hz/60Hz supply. Due to the magenetic forces in the coils, they'll vibrate somewhat.
I forgot to say something. When the device disconnected (turned off completely) it shorted. I even saw an electrical bolt as if something blew up. It didn't work again until I turned the switch off for sometime then on again.
Sounds as though the protection kicked in. The flash you seen could have been arching from some relay/contactor/breaker disconnecting. Latching until it's cleared the fault can be normal too - depending on what protection it has.
Now it always give continues high buzzing enough to wake me up at night. Still working tho giving stable voltage of 220v.
If it was overloaded, then the magnetic forces acting on the coils, and hence the forces on the core and everything holding it together, may have slightly caused it to deform/losen at some location. I don't mean in a huge way, just in a small enough way that the vibrations are more noticable.
Are there any smells? Bad smells could be a sign damage. If none, then, if it was me, I wouldn't worry about it.
One thing you didn't say is the type of Air Con unit you have. These are rarely low wattage/VA items.
Your converter is rated for 1000VA - note, this is different from power (W - watts). As the compressor consumes VAs, and there appears to be no power factor correction on that unit, then it could be simply the case that the compressor is over loading it. You could fire in an ammeter to find the load on the compressor - if it's more than just over 4 Amps, then there's your problem. Plus, if it's got an induction motor, then the inrush current could be far higher - say 16 to 25 amps.
You should have a ratings plate on your air-con unit. If your Air-Con unit has the power consumption only in Watts, then look for a power factor rating too (probably written as p.f). Multiply the Watts and the p.f. to get the VA of the unit. If it has a VA rating stated, then you have it. If that VA rating is above 1000, then you shouldn't be using it on this regulator. This is ignoring the possible issue with inrush current and the additional load of anything else connected. If your AC unit is rated at 800Watts, but has a p.f. of 1.3, then that gives you 1080VA and you're overloading it.
Hope we're getting there...