Can confirm. Reading a bunch of these letters on an alt got me to level 11 SotC while my base Watchful ended up at only 94. Most letters did NOT increase SotC, but sometimes they did. The info on the wiki page is not entirely accurate.

If I had to make an educated guess, the "bonus" SotC cp that these letters give at lower levels is not bounded by the Watchful cap. In other words, the "10x Watchful" requirement applies to the guaranteed 1cp you always gain, but not to any additional points these letters sometimes give at lower SotC values.