I am less likely to think this is related to your keyboard backlight and more likely to think it's related the fact that you've replaced the display. I would also check to see if your camera is working properly. Although the screen for the 2018, 2019, and early 2020 MacBook Airs all seem identical, the Ambient Light sensor in the 2018 screen is different, and can cause issues like what you're seeing.
Where did you source your replacement screen from? I presume the whole assembly was replaced and not just the LCD panel?