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I also think I’ve never seen legible text in a dream. This “i know it’s text but can’t really read it” sounds a lot like the issues AI image generators have.
The rise of AI made me rethink many things about consciousness. It seem like our internal image generators and text generators are separate from “us” as in the “core personality”.
It is possible to see legible text in a dream or at least to think that you do, but it’s difficult to keep it in place. It changes at the speed of thought…
I’ve had this same feeling. Stable diffusion really got me.
not being able to read was how batman realized he was in a induced dream state by the scarecrow in TAS. I’m pretty sure I’ve been able to read in dreams before but apparently it is a thing.