Is it unreasonable to expect students to read the lecture notes before attending the first class?
In my opinion, yes it is unreasonable.
Disclaimer: I am a student in the Netherlands, different universities and countries might work differently.
In all the courses I've followed I can't remember a single one that expected me to prepare for the first class. Usually the first half of the first lecture of a course is dedicated to explaining how the course works, what is expected of you, and anything else related to organization. Most students, including myself, usually don't even register in the online environment where the teaching material is posted before the first lecture.
You could argue that maybe this shouldn't be the case, and that students should be more diligent. And naturally, it is up to you whether you want to take this view and potentially punish students who didn't prepare. Practically though, most students are probably just going to miss it, or skip it.
If you do decide to have students prepare for the first lecture, make sure to clearly note this in the course guide/emails/online announcements. And also note the potential consequences for students who do not prepare.
Yes, it is unreasonable to ask and/or expect students to do 1-2 hours of reading work prior to coming to the first class of the semester. It’s not just that, as others point out, your expectations will surely not be met, but, equally importantly, that such a request is unfair to the students.
What’s reasonable is to expect the students to come to the first class knowing the officially advertised prerequisite material. Requiring more knowledge than that is effectively moving the goalposts, a kind of false advertising, and a (mild) abuse of your authority. In addition to most of the students ignoring your request, even the ones who do the reading may still resent you for this misrepresentation, and for trying to monopolize a part of their time that is not yours to monopolize - the time before the beginning of the class, when students may well be busy with other things they had planned to do.
At the end of the day, it’s worth remembering that it is your job to teach the material, and that the time between the start of the class and the end of the semester is precisely the time scheduled by the university for the students to learn that material. Assigning independent reading, while certainly acceptable, is something that should be done sparingly, and not before this official time period. Your intentions seem good and I sympathize with the general idea: I may also wish that if I’m teaching, say, a complex analysis class then students should read at home the basics of contour integration before the course starts so that I can cover more advanced material. But that’s my problem, not the students’.
I think that it is reasonable to ask that they read the notes. But I suspect that you will get about the same response that you would get to any similar request during the term. Some will do it - most likely those who need it least - and others won't. There are a lot of reasons beyond slacking why they won't. They have other commitments for their time and effort between terms.
So, my advice would be to make the request, but don't assume that it is honored. Find a way in class that you can proceed without disadvantaging some of the students. One way is to start out with pairing in the first exercises. One member of a pair might be able to bring her/his partner up to speed. Another way is to spend part of the first class discussing the notes explicitly. If the scale is reasonable, make this an interactive exercise.
Another way is to provide an ungraded quiz that you use solely to let the students know if they have any gaps that they should fill quickly. Make it clear that if they do well on the quiz they are prepared to continue, but otherwise they need to quickly bring themselves up to speed - via the notes.
Actually, maybe the response would be a bit less than normal, given that this is, to them, an unusual request.
If you are a relatively new teacher, I'll note that your students are not like you, unless this is an advanced graduate course. Very few of them, anyway. You are who and where you are because of certain characteristics and habits that the vast majority of your students don't share. It is always a good idea to remember that. You are not teaching people just like you. They probably don't learn in the same way that you learn. Explore Learning Modalities for a discussion of that. You have succeeded. They haven't (yet). Moreover their success won't be like yours for the most part.