Yeah, this should happen in the core if the screen type is set to LCD, and there should be some way for drivers to "opt out" as well. Sega handhelds were notoriously smeary (playing Sonic 2 on a Nomad is a real experience for that reason), but others aren't so we don't want to pin drivers that don't have the effect with it.
Either you or Haze are more than welcome to fix it. In the meantime, I'm off. The level of ingratitude for trying to slog through a few old bugs is making my head spin.
Well it's the same in MAME really, there are lots of old bugs which can be fixed with a hack, as Mamesick often does, but doing it that way often doesn't really bring us closer to a real solution and can bloat the code and get in the way of figuring things out properly.
Here the path is more obvious tho, although it needs somebody who does core / video output to handle it, rather than the people who work on the drivers. (Just as fixing the bugs Mamesick hacks need somebody skilled / capable of testing on the hardware to fix them properly rather than attempting to by simply reverse engineering of unclear/ambiguous behavior)