I found this unsourced reference. Which made me wonder if it is correct or not? Could this be considered an "auto-antonym" like ravel and unravel?
The OED has an entry for the verb unpeel, with three 20th century citations. The linked note on the prefix un- says:
The redundant use of un- is rare, but occurs in Old English unlíesan, and Middle English unloose, which has succeeded in maintaining itself. Later instances are unbare, unsolve, unstrip (16–17th cent.), and the modern dialect forms unempt(y), unrid, unthaw (also locally uneave). Another redundant or extended use (= ‘peel off’) exists in unpeel v.
Various dictionaries in the Oxford family list "unpeeled" as an adjective meaning "not peeled", but I have not found an Oxford dictionary that lists "unpeel" as a verb. Merriam-Webster offers unpeel as a verb, where it is a synonym for "peel".
So the usage that you asked about appears to be "correct" (whatever that means); but we now have the unfortunate situation where the word "unpeeled" has two meanings, which are exact opposites of one another.
I never unpeel anything; I always peel fruit and vegetables with skins (or peels).
A Google Ngram for these two words shows no instances of unpeel since 1800. It's probably a back-formation and, therefore, much newer than peel. Because it's a verb that means the same as the verb peel, it's a pointless and annoying neologism. The adjective unpeeled, however, is a reasonable word that describes a fruit or vegetable that has not yet been peeled.
It's correct in informal or poetic use, not in formal prose -- certainly not in technical writing.
Some of the tech. examples shown in the reference cited above by @Merk are clearly 'incorrect'.
Plant Pathologists Unpeel Rumors of Banana Extinction.
-- Sensational Title for News Item; Fine.
Easy to install, use a thin screwdriver to edge up the old screen, then just unpeel and remove it and re-stick the new screen back into place.
--Not in a user manual, never. Incorrect. Peel off the un.
Prepare to unpeel the super-sized satsuma.
--Adspeak; fine, again.
The "I" voice's desire to unpeel the layers of social convention that cloud her life is evident in "White/ Godiva, I unpeel---/ Dead hands, dead stringencies."
--Sounds nice in poetry; right place to use it.
Also found an interesting explanation in the same reference.
The "un-" in "unpeel" is not the negating prefix of "unsung" or "unbelievable," but a different prefix, one derived from Old English "and-," meaning "against." The latter prefix is the one in "unfold" and "unhand," and in a word mentioned elsewhere in this thread, "unravel." [mplsray]
In its noun form, a peel is the outer skin of a fruit or vegetable. So to prefix 'un' to 'peel' as its noun form makes perfect sense because you're explaining that you're removing the peel of a fruit or vegetable. Because the verb 'peel' is a negative connotation already, to have peel and unpeel exist is just redundant.
Very similar to shelled vs. unshelled in reference to nuts. Both of them can refer to nuts either with or without shells, depending on whether the word is used as a verb or an adjective, which can lead to a sort of double ambiguity when using either word.
These nuts are shelled.
They still have their shells on.
These nuts have been shelled.
Their shells have been removed.
These nuts are unshelled.
They have not been through the shelling process and still have shells.
These nuts have been unshelled.
They have been through the process and no longer have shells.
Unpeel looks like peeling layer(s) of anything or skin of fruits like BANANA. The prefix UN should not be taken in negative meaning. Just take it as a new word meaning synonmous to peel & peeled as verb and unpeeled as adjective. Why the language travel in new fields and getting more colors not acceptable? BR Sunkara