IMO, this completely defeats the point.
The advantage of live typing is that I can see what someone is typing sooner, before they're even done, and start considering my response. I want to see their message, or partial message, as soon as possible.
I don't want to see some movie of all of their keystrokes and corrections. It's totally fine if it comes with the territory, but only in the name of reducing latency.
That isn't to say I'm against batching the keystrokes to conserve bandwidth, but don't fake it!