The "fireball" you see is mainly an internal reflection off the inside face of the glass that faces the sun. I've illustrated the process at below right, and explained the process in the text on the figure. ( The figure below is small - the large version is in Doug's article here: http://www.equipped.org/phony_signal_mirrors.htm )

In general, there are actually two superimposed "fireballs". One is an internal reflection from the inside face of the glass face that faces the sun, and the second is an internal reflection from the inside face of the glass face facing the user.

The path illustrated below is the one arising from the internal reflection off the inside face of the glass surface facing the sun. This path exists for both solid retroreflective aimers (like the StarFlash) and mesh aimers. The path of the light creating this "fireball" traverses in the following sequence:

(a) Sunlight passes from the sun directly through the glass and hits the retroreflective beads
(b) The beads reflect the light directly towards the sun, back through the glass.
(c) The glass reflects a small fraction of the light internally, at the inside face of the glass-air interface facing the sun. This light, which was headed towards the sun, never exits the glass on the sunny side, but is reflected towards your eye, instead.
(d) The direction of the light in (c) is exactly opposite the main reflection of the mirror, so it seems to you to originate from the same direction you are reflecting the light.



There's a similar path for the retroreflective surface facing your eye. In a way, I think it is easier to understand than the first, but since many mirrors only put retroreflective material on the side facing away from you, I illustrated that one. I've also omitted the effect of refraction, since the effect works the same way with or without it, and it simply adds confusion.

Here are some patent diagrams, which include the light bending effect of refraction, but show what's going on inside the mirror in larger scale:

(1) Link to: Solid Retroreflector aimer Diagram (like StarFlash)
(2) Link to: Mesh aimer diagram (showing paths off front and back of mesh)