LED blinking with capacitor and schottky diode?
I have seen this only a few times as a method to indicate the device (mcu, PLC, PC etc) is still running. 

The LED being on (with out the circuit) means just that. But if the mcu has stopped the LED would still be on... not a great "it's alive" indicator. 

However with the circuit in place the LED blinks only if it's being driven high and low all the time. The LED should be driven by the main program loop. So if the mcu hangs, dies, is stuck in a loop etc the LED stays out after a short period.

I don't know how watch dog timers work but this is a visual equivalent.