Pauluk, you are correct. most LED's will handle a reversed voltage of a few volts. generally less than 5 Volts as per datasheet.
D2 will clamp any reversed voltage and keeps it below around 0.6 volts.
The reason i put D1 in is to reduce heat dissipation in the series resistors.
D2 and D3 acting as an AC type load.
By adding D1 the sinewave will effectively be reduced to 0.707 and power dissipating in R1 and R2 is reduced accordingly.
A diode running at mA's doesn't produce any heat which is better than dissipating it in the resistors.
Also the LED needs the DC component off the AC mains and is not affected in light output via D1.
By under running the LED , well below it's specs, the lifespan will be basically infinite.
I did trials with 47 nF 1000 Volt capacitors and a 1 k.ohm Resistor in series, which will work fine but sometimes a surge may take out the LED or clamping resistor D2.
