They could be reading books, or signs, or magazines... the list goes on. :)
Oh that makes sense now. The first time I read it I read it as "They are reading their expressions. Or reading them as in people."
In a short statement like this it usually won't mean that, but with more context it can: "De leser ham som en åpen bok" ("They're reading him like an open book"), or "Jeg er flink til å lese X" ("I'm good at reading X"), with X being things like facial expressions, body language, situations, etc.
My Norwegian friend told me that you can use leser to simply mean doing homework or studying. So would it be possible for this sentence to mean 'They are studying them.' ?
I know 'leser' means to read, but like I said, I have a native Norwegian friend who told me that you can also use 'leser' to simply mean "doing homework." In fact, the converrstaion came about because I asked her on Skype what she was doing and she said leser, and so when I then asked what book she was reading she expained that, no, she was just doing homework, which you can apparently use leser for also (I'm asusming she wasn't lying to me!).
I saw this expression used to mean 'study' many times in a Norwegian show I watch so I think you're right.