1) The literacy of a speaker does not affect whether the words they use are words.
2) The person using the word in this case was obviously not illiterate, as his use of it has survived four hundred years. Indeed, one of the early usages I cited was from Swift. Do you think you are more literate than he was?
3) Even if you don't mean "it's not a word at all" but "it's not a word recognized as part of standard English," you're quite wrong. It's in every dictionary of standard English.
You just decided to be clever, and to claim that because you knew one archaic meaning of "ravelled" which was similar to one common meaning of "unravelled," "unravelled" was redundant and should have its word-status revoked. But it doesn't work that way.