You're forgetting the effect context has on conversational CW copy. If we don't happen to know the subject under discussion is film, you're right, it would be hard to surmise "screened" from "s*ree*ed." But if you and the other station had been talking about film and you copied "THEY ARE GG TO S* REE* *ARE F**AGE OF O*R TOW*," and you were copying whole words in your head, you would probably understand what was being sent. And, most of the time you aren't copying conversation about such arcane subjects. If we look at what real-world amateurs are likely to be sending, we can see that "UR Y**I AND IC 73** *OUND GR**T" would be easy to follow if you are copying whole words in your head, and you yourself had just sent the other station the information you were using a Yagi and an IC 7300. See? Context. Generations of hams have found copying whole words in their head and taking notes to be the best way to work at speeds above about 20-30 WPM. I can predict with probably better than ninety-percent accuracy that if you get on the air and start having QSOs on a regular basis, you will eventually find yourself copying whole words in your head and taking notes, too.