She still can't read the words at one glance though. She can read them by identifying the first letter and its sound then she combines the subsequent sounds altogether then there's the word.
This brings to mind a conversion a teacher had with us when I was in school, many years ago. She was talking about the different approaches to teaching reading and her preference was actually that they start reading in the way your niece is, by recognising the letters and the sounds they make as they read the word. Recognition of the word at a glance will then come over time. If they learn by recognition alone, then they don't always differentiate the words so they might see the word "carrot" regularly, then when they see "parrot", which has the same pattern, they would read it as "carrot".
I think it's a good way for her to be reading, because, in my experience, it helps as they moves onto longer words. They gain more independence and confidence in reading, that way.
I agree. I just don't rely on words that rhyme. I make sure that they understand the sound of the letters and how to combine it with the next letters. It's actually confusing specially there are words that if you just combine the letter sounds you would surely misread the word like for example "hid" and "hide". I know she'll learn more along the way I just have to improve her vocabulary and explain to her patiently the rules so she would remember. It's so difficult to teach honestly but I have to because I'm afraid she'll get behind her learning if she wouldn't at least something during this pandemic.
It doesn't help that the English language doesn't always follow the same rules.