The case
The box sat on the breakfast table for the entire Saturday-morning lineup and the spelling still didn't stick. Toucan Sam's cereal is, and always has been, Froot Loops, with two O's.
There's a practical reason: a cereal can't legally call itself "fruit" when the fruit content is flavoring, so the playful spelling did double duty as a brand and a hedge. The eye reads the word it expects and moves on to the prize.
Why our brains do this
We read whole words by shape, not letter by letter. "Froot" and "Fruit" have the same silhouette, and the brain autocorrects.
Sources: Wikipedia — Froot Loops · Wikipedia — False memory: the Mandela effect