Can people read that? I want to do a study to see the cognitive difference between people who can read that and those who can't.

I can't at all.

I could read every word at nearly full speed, with the exception of "tends" that required a lot of puzzling out.

But I'm backfilling a lot of information from context, the same way that this works: https://www.dictionary.com/articles/typoglycemia

It would have been much harder to read a series of random words, or another piece of text with a less predictable structure.

I tried copying a random line of text, pasted it into the textbox and could read most of it. Only a few words tripped me up.

See also Picket Right, 2 pixels wide (7 high) and still readable: https://stormgold.itch.io/picket-right-font