There's a 13th-century poem containing the name
Lleucu, (Marwnad
Lleucu Llwyd) so nope, not a recent invention.
Lleucu isn't used as a form of
Lucy; it sounds nothing like it, it's a name in its own right, and is used as such.
And a modern Welsh spelling of
Lucy is Liwsi, as used by someone I know on her daughter fairly recently.
(I'm Welsh.)