how are schools handling students who memorize books but can't actually decode

"can't actually decode"

Do you mean by this that the children can't actually read but memorise stories that have been read to them?

I think memorising stories is quite common in young chilren before thay can read. That's why they often object if a word or phrase is changed.

I haven't heard of this holding up their reading ability when they are a little older.

*they

‘Whole pattern books’ and ‘decoding’
I don’t even understand your language ekartroda

one of our relatives kids used to do this. In his 20s he had a breakdown and was diagnosed with autism

I was quick to learn to read and my Mum was convinced I'd just memorised the text.
She used to make me read the sentence backwards to check if I could actually read each word 😂

You ask questions about the text..

As chocolatelovinggran suggests.