She isn't really reading. She's paraphrasing what someone (in this case her dad) read to her.
But she wants to read, and for the same reasons you do.
She's curious. She wants to know more about the world—how it works, her place in it.
But mostly she wants to hear a story. Just like you.
Kids don't care about alphabets or phonemes.
If they have even the slightest interest in the fact that "B" makes the "buh" sound it is strictly as a means to an end. The end being that they get a story.
Kids love stories. And they love songs, which are a lot like stories. Why do we teach the alphabet with a song? Because reciting a bunch of letters...a, b, q, l, x, y...boring.
Readeez use songs and stories and poems and characters to teach. Because it honors what children want.