Uh... No. It doesn't work. It just make what is there look like something else. It also reflects the other light sources around causing it to shine.
BUT... It would make lasers reflect more as well, reducing that damage.
BTW, yes, I am aware that lights were installed on some WWII era aircraft (bombers, IIRC) in an attempt to make them harder to observe. It was effective, but wasn't followed up on for some reason (¿radar maybe?).