My ds did the same thing (although he wasn't an early reader. Before he learned to read (when he was really young) he used to seem to memorize full books. Once he learned to read he was reading college-level books within a year or so... and because he seemed to learn to read so effortlessly we just never paid much attention to whether or not he had been exposed to and learned phonics at school. He has a huge vocabulary which can't possibly have all come from conversations at home and school, and he never needs to look up word definitions, so I've always guessed that he's picking up the meaning of words from the context of what he's reading.
FWIW it doesn't seem to have impacted him in other areas - he studied one foreign language when he was in elementary and did really well, and he's studying another in middle school and also doing well.
polarbear
