This is way cool. Unlike many optical illusions, this one doesn't exploit a glitch in our brain software; this one is all about our brains making a reasonable, but incorrect, interpretation of information. The reflected lights are behaving exactly like they would if they were distinct light sources in a tunnel, so the brain concludes there's a tunnel. I imagine that visually-oriented machines would come to the same conclusion.
I remember as a kid these things were still really popular in stores in the early 80s. They were usually in with the black-light posters and waterfall signs.