It hasn't given you a 'universal Turing machine with unbounded memory', it has given you a 'finite-state machine'. Important difference, and this is one of the times it matters.

Good point, and in that case Unseelie would have to limit what comes out of the nanofabricator to less than what could be reassembled into a more complex machine capable of intelligence. No unbounded numbers of seat cushions or any other type of token that you could use to make a physical tape and manual state machine, no piles of simpler electronic components or small computers that could be networked together.