Sally, I read about making rugs this way
after I had discarded what I thought 12 totally unusable cotted Heb fleeces.
According to Ravellers, you can do it with strips cut from the cotted mass, or from rovings which you may or may not have felted slightly or quite a lot, or from semi-rovings made by twisting chunks of fleece, just as you describe. So now I know what I can do with those 12 fleeces if I get given them again this year - please document your projects for us!
As to washing... I can't see why you couldn't wash the whole rug just as you would a fleece, provided you have equipment large enough to do so, including drying space. I wash chunks at a time in a small washing-up bowl, can't do a whole fleece at once, would have to buy some bigger baskets - or not mind a bit of felting, which I guess with a rug you wouldn't in fact mind.
But if she didn't mention it in the video then I imagine she'd washed the fleece before she started. I guess you can do it either way.
Anyway,
you get what you wanted and have lots of adventures for us to share vicariously!