That's a legit complaint, this doesn't help cyclists or pedestrians. Though selectively dimming lights is definitely cool as fuck and a good idea.

I think with further development this could in fact be a good solution.

Another strategy could be, rather than trying to identify various non-road objects, and avoid blinding those, to instead try to positively identify the road, and only illuminate that. If it's actively trying to not shine on anything it isn't certain is road, that could work. It's at least an avenue worth exploring.

Also, if you're already putting lidar in vehicles for collision avoidance, the headlights are one more area where that capability could be utilized.