LEDs by nature are more efficient than incandescent bulbs, but that doesnt mean they dont generate heat. They do produce more light per watt than incandescent but if you put 1 or 3 watts of power through a tiny 5mm piece of electronics you are going to make it hot.

In the concept above, and by looking at the photos I would guess the designer indended to use low power 5mm LEDs so heat would not be an issue. But you also dont get much light from it. It would look mostly like a mood light or night light.