We did this test with 90 children last year and we honestly did not have any issues with any child refusing to try and read them, or even not wanting to.
We had 3 or 4 who could not read many, achieving just 2-4 in the test, due to their individual learning difficulties. But they had a go, and happily.
They all got an shiny, puffy alien sticker afterwards too, which went down very well!
The lower end just had a go.
The top end read them no issue.
The middle groups had a go, gave them a try and either read them or didn't manage them.
Seriously out of 90 children - not one wouldn't have a go, and not one got confused by the idea. They didn't even try to turn them into real words - as they had all come across pseudo words previously.
And tbh we had no surprises either, well not negatively. We had a handful who did better than we thought, but all the ones we thought would pass did so. All the good readers passed easily.
We have a group who will be redoing it in June, in Y2. Most will pass. 3 or 4 probably not, despite more intensive phonics and additional support - because of their learning barriers. But they have all improved on their phonics and reading, so are making good progress for them, just slower. They will get there.