This is often called “Hardware UI”. It doesn’t have to be LED based, it can be incredibly mechanical. Check out some of the interfaces on Crown forklifts or Fluke products for example. Even the slide switch on the side of an iPhone is an example of this… of course it can be done with LEDs and such the way Mike described above.
We produce of animations to document this to the engineering and dev teams. Here is an example of a use we did in production of indirect LED lighting to indicate various EQ states designed for specific video games. Using a row of 3 color LEDs and timing them we were able to create some pretty interesting animations that momentarily would activate when a mode was switched. It gave the product a fun, “Close Encounters of the 3rd Kind” vibe.
