Yes, blacked-out headlights work. The main reason why people black out their headlights is for aesthetics; it gives their car a more aggressive look. But there are some functional benefits to blacking out your headlights as well.
One benefit is that it can help reduce the glare from oncoming traffic. Blacking out the chrome around your headlights creates a matte finish, which scatters light in many directions instead of reflecting it directly into oncoming drivers' eyes. This can be especially helpful if you drive at night or in foggy conditions often.
Another benefit is that it can make your car more visible to other drivers. If you have ever been driving with your high beams on and had someone flash their brights at you, you know how annoying and even blinding it can be. By blacking out your headlights, you are actually making them less likely to blind other drivers when they reflect off of objects like signs or reflective puddles.