Leaving out quotation marks, or other punctuation, can work if done well but there's a big difference between whether a writer can do something and whether they should do something. The difficulty is that it's much harder to do it well.
Literary fiction is a genre where technique and style matter. The problem I have, especially with some of the more experimental stylings such as the avoidance of quotation marks is that unless done extremely well it tends to jump out at me; like the author is shoving their cleverness in my face while shouting about how wonderful they are. A good writer uses techniques so you pay attention to their effect and only later realize the technique, a less good one draws attention to the technique rather than the effect.
I'm not a fan. Too often it comes across as pretentious and pompous, more about the writer than the work.
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