What is this in my system tray?
I've found it in the Android API: http://developer.android.com/reference/android/view/View.html#setSystemUiVisibility(int)

A flag, SYSTEM_UI_FLAG_LOW_PROFILE, can be passed to indicate that certain UI elements be put into a Low Profile and offer less of a distraction to the user. If I had a nexus device (really any device with soft buttons across the bottom) then I would also notice those buttons being replaces by the same dim circle I'm seeing in my navbar.

This has been available since 4.0 and is intended for book readers, games, and other immersive applications.