LIDAR works be measuring the time it takes for light to return so I don't understand how a object can be too reflective. Objects that absorb the specific wavelength the LIDAR uses is an obvious problem.

Too reflective, like a flat mirror, will send the light off in a random direction rather than back as the detector. Worse yet, things like double reflections can result in timing errors as some of the signal follows a longer path. You want a target that is nicely reflective but not so shiny that you get any double reflections. The ideal is a matte surface painted the same color as the laser.