Hand Solo and Jet II have it right - LGCIU 1 sends on ground/in flight signals to various services around the aeroplane. In the event of a failure of LGCIU 1, some users will see a "flight" condition, and some will see a "ground" condition. Whether things see flight or a ground condition is dependant on whether it's a proximity detector that's failed or it's an electrical failure of the LGCIU itself. See FCOM 1.32.10 p5.
In either case, the FADEC on the relevant side will see a flight condition, and thus will inhibit reverse on that side, along with a few other things. FCOM 1.32.10 pages 6 and 14 refer.
Cheers