It's amazing because a power supply diode is usually designed to handle
a lot of current (like 2, 3 or more amps), while an LED is usually
designed in just the opposite way, that is, to operate with a minimal
amount of current passing through it. (like 10 mA). You stated that
there was heat discoloration on the PCB near the diodes - that
indicates that they ran hot, which usually means they carry a lot of
current during the normal operation of the circuit (are are likely
designed that way).

The fact, then, that you were able to replace one of these devices with
an LED, apply power, and not have the LED instantly explode
is...well...amazing.