The first thing most people don't realize about LEDs is that they emit the majority of light from sides not from the top. In fact the top of an LED is where the bond wire connects.
This means that to maximize the light output of an LED segment, the plastic molding needs to have a polished internal surface, and be angled to reflect the light towards the top of the molding where the diffusion layer is.
The diffuser is the layer of thin sheet plastic on the top of the plastic molding. It diffuses the reflected light from the LED to create a uniformly bright segment. If there is not enough diffusion, the LED can appear as a bright spot in the segment and thats poor quality.
LED, PCB and plastic assembly
A DC current through the LED will provide a constant brightness. The brightness being in direct proportion to the current. More current = more brightness. However there are limits, namely thermal destruction! An LED has some resistance to current. That resistance will produce heat and as the current goes up so the heat dissipated by the LED goes up until eventually a limit is reached and LED breaks and stops working.
By using Pulse Width Modulation (PWM) techniques, we can reduce the current through the LED, while appearing to increase the brightness. This is because of something the eye does called integration.
If we have a high enough frequency for the PWM, the eye will not see the LED flashing, but sees it as a constant source of light. If we take 2 LEDs, and one we provide a DC current of 10mA. The other we provision with 20mA with a 50% duty cycle, both are using 10mA average but the PWM LED appears to be brighter.
Getting it all Even
So we have our LED bonded to our printed circuit board. We have a plastic molding that is shaped to reflect the light from the LED upwards to the top of the LED well. To even out the light we add a diffusing film over the top of the well. This does two things; it evens out the light distribution reducing bright spots in the LED segment, and it protects the LED assembly from damage and ingress of dirt and other foreign particles that may prevent operation of the LED.
There is of course a lot more that can be written about the structure of an LED segment, but the purpose of this post was to cover the basics and I think we achieved that.