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It kinda is. Unless you have a REALLY good reason not to, you pronounce the letters in the same way as you would if you were saying the whole word.
There is no such reason in this case.
No it isn’t, you pronounce an acronym as if it was its own word. The A and O in NATO are pronounced nothing like the ones in Atlantic and Organisation.
Its own word starting with the same letter variant as the first component word.
