I would be slightly more charitable than that. I don't think it's a matter of failing to read or understand the surface of the material, I think it's a failure to seriously engage with it. He's the Tolkien equivalent of a 2005-era Reddit atheist who is can rattle off all the worst parts of Leviticus but has no empathy for why people actually connect with their religion. (Unrelated: I am describing myself here.)
Like, the beating heart of LotR is a kind of 20th-century romanticism, a celebration and eulogy for a world in transition to something wholly new. Combined with the fact that Tolkien largely codified the whole set of fantasy races I can sort of understand where people with fascist tendencies connect with it. You could interpret some of that in a very "RETVRN"-coded way where Gondor and the Shire are both the glorious homeland that needs to be protected and/or reclaimed, especially if you dig into certain elements of the lore around Numenor. Alternatively in that kind of reading it's entirely possible to construct an argument about how Sauron and Saruman are the bringers of progress and industry. Pretty sure I remember a cracked article back in the day that made this argument for laughs, but you can assemble it from the parts in the text. Either way you can make something of it that I imagine Thiel and his set are pretty damn comfortable with.
Of course that would require ignoring the far more central theme of the story, which is how power is inherently destructive. The ring itself is the most obvious manifestation, but I think the other element that gets lost is the way that Sauron is ultimately defeated not by Gandalf out-wizarding him or by Aragor out-kinging him or Gimli, Legolas, or anyone else out-fighting him. It isn't even Frodo and Sam persisting in their quest and resisting the call of the Ring, for in the final pivotal moments even their strength and righteousness failed them. Instead, it comes down to Gollum's greed and devotion to his Precious. His weakness, in other words. Tolkien coined the term Eucatastrophe to describe this kind of moment, and it's notable for being the culmination of the story's smaller moments. Time and again the heroes of LotR choose to do what is right and act with mercy, honor, courage, kindness, or respect not because it's the right strategic choice - indeed the most logical consequence would have been failure in a thousand predictable ways - but because of their connections to each other and their faith that rightness and righteousness will somehow align.
This is of course antithetical to Thiel and the whole project which worships power rather than fearing it. The whole theme of the Hobbit essentially is a rejection of the attempt to be "agentic" and exercise power over the whole world rather than enjoying your own life. Bilbo's heroism explicitly comes not because he's going to save the world but because he wants to help his compatriots recover the same humble comfort of home that he enjoyed his whole life.