The worked-example effect doesn't say that worked examples replace exercises. It says that worked examples prior to exercises beats exercises alone.
There's a section on that page about faded worked examples:
"In order to facilitate the transition from learning from worked examples in earlier stages of skill acquisition to problem solving in later stages, it is effective to successively fade out worked solution steps"
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The worked-example effect doesn't say that worked examples replace exercises. It says that worked examples prior to exercises beats exercises alone.
There's a section on that page about faded worked examples:
I'm confused now; you say that reading + doing beats doing alone, which does not conflict with my point that you can't learn by reading alone.
It sounds like we're in agreement that reading alone is insufficient.