Memory's funny. It seems you can forget things, like birthdays and names, but you can't forget skills (how to do things), like riding a bike or how to fight. It's the reason amnesiacs can forget what someone's name is but can still walk around like anyone else. I could almost argue, in this case, that reading is a skill and can't really be forgotten, especially if it's ingrained from an early age like it typically is.
Now, if Krane's mother tongue isn't English (or what's spoken/written in Alola), that'd be a little different. Then it'd be possible he forgot how to read what is, to him, a foreign language. (I'd argue that it's not a skill so much as remembering what words in a foreign language mean in your mother tongue; source, my time learning Spanish.) And if his only memories are from his time in Alola, he'd likely not have encountered another language, thus the assumption he can't read at all. (It's worth pointing out that Krane, like the protagonist from S/M, is from Kanto, so it's entirely possible, but there are other holes so I wouldn't grasp this hypothesis too hard, haha.)