Even the B-2 bomber had a retractable radar reflector to defeat it's stealth. When flying in civilian airspace the reflector would extend so ATC could track the plane. Standard stuff to prevent collisions.
To start with, a reflector is passive, so it can't fail like a transponder. Failing is a problem when flying an intentionally very hard to see/detect airframe in dense civilian airways. Transponders only provide a secondary radar hit, while many (older) systems are looking for a primary hit to locate aircraft, which a reflector would do.
Any system that relies on a primary hit is going to have trouble. Something as simple as a composite glider is not going to show up well[1]. I'm not aware of any ATC system that relies on primary returns.
As for Googling it, that's an interesting picture. It's not retractable, but I suppose the point is made. Perhaps the B-2's is retractable. I did Google it this time and found nothing but some random airliners.net forum posts, not exactly reliable.
