Is it possible for me to embed a youtube unlisted video with copy protection
No. And even if you could, there’s nothing to stop a student recording it using screen capture on their computer or using the camera on their phone.
Also, once you're showing them the YT video they can always go to YT itself to watch it - and once they are there, there are many apps which will skim the video from YT, irrespective of what you may attempt to prevent in Moodle.