> The veiling glare and flare light will be overlaid over the luminances of the scene, and contrast will be reduced. The effect will be most marked in the shadows where the flare light will be a significant proportion of the total luminance, but scene luminances will not be destroyed. The effect is similar to viewing a movie with the lights on.
Yes, or like projecting the slides with lights on; but that is a part of the story. The other part depends on what we agree to call "scene luminances".
> I have a well regarded book on photographic exposure dating back to the film era, where the authors stated that flare is not entirely deleterious since it lifts the shadows to a level that can be printed.
If it is veiling glare only, and if it is more or less uniform, it is the case sometimes. But even a uniform glare destroys details in shadows.