Can WS2812B strips be "multiplexed"?

All of those LED cubes with upwards of 512 LEDs only have 1 LED on at a time and do the persistence of vision thing.

I have a 16x16 arrangement of WS2812B RGB LEDs, but basically a 256 LED long strip (snaked back and forth)
I'm powering the thing with a power brick and just have a data and ground going to the Arduino. Having a bunch of LEDs on at the same time isn't a problem, there's enough power for that, I'm just learning by seeing what's possible.

I'm wondering if the data hookup arrangement of the WS2812B's still allows a persistent display to appear while only really having one LED on a time.

I'm using the FastLED libraries and can make patterns, colors, etc as I want, but even when I set 1 LED on at a time and scroll it through all 256 without any delays in the sketch, it's a single LED seen moving along the path. Rapidly, but visibly.

Is it possible for 256 WS2812B's to be refreshed faster than human perception?
Meaning turning on and off the first LED, and reaching the last LED while the brain still sees the first one as on?
I'm wondering if the restriction is in the FastLED library or if it's a hardware restriction with the way data is setup.

Is it possible for 256 WS2812B's to be refreshed faster than human perception?

No.

To get the colours the LEDs are faded using PWM. The PWM frequency is too low to do much in the way of multiplexing. The dot star are much faster with the PWM and are more suited to this sort of thing.

All of those LED cubes with upwards of 512 LEDs only have 1 LED on at a time and do the persistence of vision thing.

No, they tend to be conventionally multiplexed with a side on at a time.

Dotstar looks more like a WS2801 in WS2812B form factor (8 pins, integrated LEDs), with an SPI-like interface (clock in/out, data in/out, no chip select). WS2801 good for 25 MHz, but 8 MHz is all you can achieve with 16 MHz Arduino.