They can be fed dry. OBVIOUSLY, they require more chewing than shreds and thus the issues. If your horses are elders and lack jaw teeth, this is not for them. Very young, same deal...and at an age where caps are dropping, caution is best.
So, matured horses with good teeth and good eating habits can eat them dry. Those who bolt, don't chew, etc. are better of without the whole pellets in favor of shreds &/or soaked.
I use pellets. They have been coming to me in a shorter pellet size (like they've been broken up, not long)from Blue Seal. Most of mine receive them dry, mixed in their pelleted feed (Blue Seal Demand, about the size of a Strategy pellet). Have done this for a couple of years and had no issues. My older ones get them soaked.
They will become approx 4-5X the volume when soaked, so keep that in mind as you measure. Truly the ones I am getting now are approx 1/3 of an inch long, so one good chomp and they are broken down to almost shred sized. Chewing is a must, along with good drinking habits.
The risk, if not chewed, could be choke. So, size of pellet is critical in addition to horses normal habits.