I thought exactly the same way as you did about Incremental Reading. However, after reading plenty of chats about this amongst other Supermemo users, I believe many of them are doing this....
Read & highlight > Add all highlights to Mother Topic > Split Mother Topic into subTopics > Cloze deletion
...rather than what I thought the "official" Incremental Reading approach would be, namely,
Add article(s) to SuperMemo > Periodically read and extract sections of these articles > Reduce these subsections down again on next review > Close delete the most granular entry.
Once you get the reviews going for the cloze deletions, the information starts to sink into the subconscious, giving you the neural lexicon for the material.