Actually, you'd be doing much the same thing as we do when we put velvet masks on the top and bottom of our FP screens. I use velvet and I can't detect the existence of the unused portion of the LCD panel.
Not all velvets are the same. Some have shorter "fuzz" than others and are less reflective. I was blessed with having a half dozen sample books to choose from and picked the least reflective, which is almost completely non-reflective.
If your valance is other than a flat piece of velvet, you might get a bit of reflection back from those portions that are at more of a right angle to the viewing spot.
You'll probably have to get a small piece and experiment to know for sure what the result will be. If there is a very slight reflection, it's likely you won't notice it in use. I was projecting a 16:9 picture last night and had my mask set for 2.35:1 and didn't notice right way that I was projecting the picture partially on the velvet. By the way, I have 1400 Ansi Lumens from my projector on a 6' wide picture so it's plenty intense.