I was pondering this whole situation a bit more and was thinking of it like the way your eyes perceive fast pulsing strobe lights.
Your eyes have some "persistence of vision" where a brief flash of an object is played out over a short length of time.
For instance if you are in a dark room, and someone takes a flash picture you can see an image left behind of what was in the flash a bit after the flash is already off.
If you have an adjustable strobe light and start turning up the pulse frequency eventually the room just looks "normally lit up" even though the strobe light is still flashing (albeit at a fast rate.)
Yes, with CRT screens that had 50 or 60 or 72 or 75 or 85 type range of refresh hz, some people would start to complain that they noticed flicker at the slower pulse rates.
It seems different people have different thresholds at which the perceived pulsing turns into a solid image.
Anyways, I think of many of these LEDs as a fast flashing strobe light. For most people, most of the time, it looks like solid, continuous light, but for cameras with high effective "shutter speeds" they can sometimes catch a still image when it is in the "off" mode. I would guess that some other animals / insects have different types of eyes that might see the LEDs flicker even though the pulse rate is very high.
As someone had mentioned before, apparently pulsing it between 100% on and 0% off very quickly results in a view that looks brighter, but uses less energy than it would use if you just ran it continuously at 60% power. Your eye "remembers" the flashes of bright view and lets you see more than it would be if you just had an always on dimmer light.
Perhaps a bit analogous to the way a radar system strobes pulses of microwaves, but shows a continuous dot on the view screen.
I guess it isn't entirely your eye that evens out the pulses though. CRT screens, and phosphors put in front of LEDs continue to glow a bit after power was stopped... Although the flashing seen by the digital cameras suggest that the LEDs do go dark rapidly. Incandescent bulbs continue to glow relatively long after power is stopped, so AC or pulsed (dimmed) incandescent bulbs don't show that telltale flicker on cameras.