Lithium polymer battery charger with LDO and AVR
I think you are right. I think this setup will work OK (without the series diode). I am not totally sure what the effect will be of the occasional &lt;500 ms 100 mA burst. It shouldn't prevent the charge from terminating, but it could cause a voltage dip which may initiate a new charge cycle. I think it would be worthwhile to test and see what happens if possible before you commit.

I would like to point out that even without the diode, this setup will not give you the best battery life. Once the battery voltage drops to 3.5 or 3.4, your LDO will not be able to supply 3.3V any more. If it is possible to power your circuitry at 3.1 or 3.0V, that would allow you to use more of the available battery power. Good luck!