It’s legible, but it takes a bit of active effort which makes it tiring to read more than a few sentences in a single sitting.
The actual problem without using spaces is not that humans can't read it, it's that computers can't read it (without at least complete dictionary and maybe some AI help). GNU aspell for instance does not support languages that don't use spaces.
https://en.m.wikipedia.org/wiki/MeCab
Like you said, it does come with a dictionary to work properly.