How come serial cables LEDs don't get dimmed instead of switching on and off when sending serial data?
I can assure you that you can dim LEDs by attaching them to serial lines and switching them on and off by sending specifically prepared data. I've done that.

The reason you're not seeing dimming might be:


Your colleague is right, and the controller chip simply keeps the LED on for as long as there's communication and a while longer, so that it never turns off in between
brightness perception isn't linear. So, turning off the LED for 1/8 of the time, for example, simple won't be visible to the human eye.