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If you truncate a file¹ while another process has it open in w mode, that process will continue to write to the same offsets, making the file sparse. Low offsets will thus be read as 0s.

As per x11 - Concurrent writing to a log file from many processes - Unix & Linux Stack Exchange and Can two Unix processes simultaneous write to different positions in a single file?, each process that has a file open has its own offset in it, and a ftruncate() doesn't change that.

If you want the other process to react to truncation, it needs to have it open in a mode.

Your approach has principal bugs, too. E.g. it's not atomic: you may (=will, eventually) truncate the file after the producer has added data but before you have read it so it would get lost.

Consider using dedicated data buffering utilities instead like buffer or pv as per Add a big buffer to a pipe between two commands.

¹_{Which is superfluous because open(mode='w') already does that. Either truncate or reopen, no need to do both.}