You can delete the UI fonts folder completely and as far as I can see, the game and all dialogue in game still appears to run fine.
Yeah. Since writing this forum post, I found that out for myself, too. I changed the fonts.xml file and removed the folder, and - like you discovered - the game still had all its fonts intact.
I think you are right that they might very well be hardcoded into the main executable.
If so, that's a shame as I really wanted to add a nice chalkboard font to improve the look of things.