You can redeem it only if you add it to Coin, because your order has to be routed through the BSE Star MF platform and redeemed with the respective AMC which is possible only through Coin.
There are no extra charges or fees for holding MF uniits in your Demat account.
They could be referring to the Annual Maintenance Charges(AMC) for the Demat account charged by the broker. The AMC at Zerodha is Rs.300 per year, payable on March 31st on a pro-rata basis. You can also have your Demat converted to a BSDA account where there are no AMC charges if holding value is below 50k. Process and details mentioned here.