Because of that series diode, it is not conducting and so there is no circuit.
So the LED is also a diode, and it is also blocking current flow when the A/C circuit is positive at the lower connection, and you would have the full reverse A/C voltage being blocked by the two diodes, in that path ( the diode, and the led ), which are in series and pointing in the same direction.
I am still very unclear how you are sure that the reverse voltage on the LED will be less than the alleged 5V breakdown limit.
Duriing the times when -230 volts is present on the A/C terminal of that circuit, how can you be sure that 225 V of it will be present across the terminals of the external diode, and only 5V or less across the terminals of the LED ?