I will preface this by saying that I know nothing of education theory, I am just a mom. No qualifications.
Having said that, her system is basically how my son learned to read. Not on purpose, mind you. He started reading on his own just before he was 3 - mostly short sight words. So I started him on phonics because I didn’t want him to develop bad habits like recognizing words only by sight, thus risking that he transpose letters or read the words incorrectly because he is mainly looking at the shape. Anyway, it worked well for him and I plan to do the same thing with the child I am expecting. When they start reading sight words on their own, I will start phonics. We do teach all the letters and basic letter sounds early but just in day-to-day play. Oh, and lots and lots of reading great picture books!