For me as a Japanese language learner, it works fine so long as the text uses enough kanji. I've tried reading some Japanese-language books meant for kids around age 10, and the sentences that have 20 hiragana in a row can be killer. If a sentence uses both grammar you don't know and vocabulary you don't know, then how the heck are you supposed to figure out where each word begins and ends so you can look things up in a dictionary?
E.g. さっきまでは、心ぼそくてなきだしそうなのを、ひっしにこらえていたリナだったが、いまはまいごにまちがえられたことに、はらをたてていた。
With e.g. まちがえられた you could parse it as 間違えられた or 町が得られた and you can only tell the difference through context and intuition, which a learner of the language might lack. Even being able to recognize は and に as particles, rather than parts of the nearby words, requires context and/or guessing.
Kanji makes it a lot easier to figure out where words begin and end. Nouns are often written entirely in kanji, while adjectives and verbs are usually written with kanji at the beginning and hiragana for the parts that are conjugated (the ends, in both cases). A switch from hiragana to kanji usually means a word boundary, while kanji to hiragana can go either way.
> I've tried reading some Japanese-language books meant for kids around age 10...
I’m not sure at what target age kids’ books stop using word spacing, but books for younger children generally use it. Nevertheless, if you are used to seeing words written in kanji, even with word spacing an all-hiragana text can still trip you up, for the reasons you noted.
Side comment: Something I haven’t seen remarked on much is how Japanese can be easier for small children to start reading than English is because of the nearly one-to-one correspondence between character and sound for kana. My two daughters and now my six-year-old grandson have all grown up with Japanese as their first language, and they all started reading hiragana-only children’s books earlier and more easily than I, at least, learned to read English when I was a child. My grandson has also picked up katakana on his own; he is into dinosaurs and his picture books give the names of dinosaurs in katakana.
Ditto with Thai, Chinese, Lao, etc. I think Korean is the only east-asian script which uses word spacing. Given the late introduction of word spacing into writing, it’s almost more a surprise that scripts have it than don’t.
