Dont worry. When I read with my daughter, she refuses to read aloud any words. but when I 'm not with her, she can read on her own. As far as the teacher do not complain that she is lagging behind, I assume she is up to standard.
No worry. During a school interview, the teacher asked my daughter to read a chinese book, but she can't read all. So she told the teacher, she only know some words. The teacher then asked her to read the word that she know.