There's a lot at work in the optics of this stuff. When you say "whatever doesn't stand out is unworthy of attention", I think it's fairer to say "whatever doesn't stand out isn't seen", as in is below the threshold of detection. A crossing guard's blinking red light can be invisible in some times of day/year, and at night everything that isn't well lit is just some shade of shadow, which looks an awful lot like unoccupied air. For the avoidance systems, I think we're really going to net win on that, since they'll need to see things that aren't well illuminated, like fallen trees and ditches. (I really, really hope so at least.) Basically, the systems will have better eye sight than us.

In a lot of ways, I think this is a form of faking a HUD for people. We want humans to shine, like there's an OLED display overlay pointing at people or like a thermal imager behind walls. Reflective paint does that really well - at least it makes clothing-shaped blobs hovering in mid-air - but I think the intensity is merely that car lights are bright, so the retroreflection is far brighter than the little LED lights people tend to buy. You need something that a motor vehicle driver considers conspicuous, which is going to be something with the lumen output of a head light or brake light. In the video you linked, the bike's red tail light really isn't really bright enough, but the jacket absolutely is unmistakable. And blinking things really are great, since movement catches attention nicely (so long as bright-vs-dim has enough contrast). The bobbing retroreflecting foot pedals in the clip show they're an excellent tell-tale of a bike on the road.