The frontlight is partially reflective on the inside, like a one-way mirror.  It's VERY partially, but if it wasn't at least a little reflective, it wouldn't really work.  I think this screws with the reflection of ambient light off the LCD when playing without the frontlight turned on.  
I'm not an optics expert, but this is the only reason I can think of that everybody with an FLU says "How can you possibly use a GP32 without a FLU?!?"  I have a non-FLU, and it works just fine for me.  The only time I really had a problem with light was when I was playing outside AFTER sunset.  The screen is much easier to see than my GBA in any conditions.