Previous reports were that the lightbar could be completely switched off, this is not that case.
The lightbar on DualShock 4 controllers works with the PlayStation Camera as a tracking beacon. When there is more than one person gaming the lightbar will designate each player a color decided on by the order in which they start gaming (blue,red,green,pink).
I don’t own a PS4 but know a few people who do and they tell me that the brightness of the lightbar is extremely annoying, so I think this feature will be received by all with open arms.
Included in the firmware update will be video capturing. For more details on this please see: Playstation 4 to get creative with video capturing