How would a Pages document end up as a series of embedded PDFs? My grandfather has been writing a book as a Pages document, but he told me the other day that he suddenly wasn't able to edit the document. He thinks that this happened around the same time that he upgraded to the latest version of Pages.

When I went to take a look at the document, I saw something strange: the Pages document consisted of a series of embedded PDF documents containing the original text of the document. So the first page is a page-size embedded PDF with the file name "preview1.pdf", the second is "preview2.pdf" and each PDF has a page worth of text.

It's a very strange problem. He said this had happened to several of his documents and I opened a few to confirm it. Obviously, I could fix this for one document by copying the text in each PDF page and pasting them into a new Pages document.

But the bigger questions are: (1) how did this happen? and (2) is there a systematic way to fix this that doesn't require going through each document and copying each page's text manually?
The state of the file you see might be the result of the use of a new function introduced with version 5.2 of Pages: the view only mode.
See the official documentation here:

Share and edit a document with others.

The original file on the Mac of your grandfather is still fully editable. The view-only mode does only restrict modification upon the shared version on iCloud. If your grandfather want to make the shared version fully editable by others (sharing the iCloud version),
then he should modify this setting on the original file and afterward resend a link toward this document.

Try these 2 documented functions on a new empty document to avoid errors.