This is a really cool idea, I do wonder how much of this is memorization and how much of it is typoglycemia (the ability to read misspelled words or words missing vowels etc without any major pause).
I think it uses that phenomenon in service of memorization, but memorization definitely occurs. If you review a text fully, the latter levels don't have any letters and by the time you reach them you have fully memorized the text and only the order of the sentences remains hard to recall.