That is correct that HIDs will look like **** in a halogen reflective housing. Halogen and HID headlight assemblies are very different in design. HIDs are not supposed to reflect at all. That shroud you are referring to is keeping the halogen lamp from blinding other drivers by looking right at the lamp. With HIDs being wayyyyyy brighter than halogen..... if you removed that it's pretty much guaranteed you're gonna get in a road rage situation with another driver who is already having a bad day then you come by and blind them. Not to mention tickets from cops.
At minimum, you need to get aftermarket projector headlights. The right way, is to retrofit true HID projectors into the housings.
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