Your intuition is correct, it doesn't! A "3D hyperrope" is in fact just the surface of a ball[1], and it turns out that you can actually form non-trivial knots of that spherical surface in a 4-dimensional ambient space (and analogously they can be un-knotted if you then move up to 5-dimension ambient space, although the mechanics for doing so might be a little trickier than in the 1d-in-4d case). In fact, if you have a k-dimensional sphere, you can always knot it up in a k+2 dimensional ambient space (and can then always be unknotted if you add enough additional dimensions).

[1] note that a [loop of] rope is actually a 1-dimensional object (it only has length, no width), so the next dimension up should be a 2-dimensional object, which is true of the surface of a ball. a topologist would call these things a 1-sphere and a 2-sphere, respectively

Any time I am tempted to feel smart, I try to go and study some linear algebra and walk away humbled. I will be spending 20-30 minutes probably trying to understand what you said (and I think you typed it out quite reasonably), but first I have to figure out how... a 3D hyperrope is the same as a surface of a ball...

I'm not sure what you mean here. This is discussing a 1-dimensional structure embeded in 4-dimensional space. If you're not sure it works for something else, well, that isn't what's under discussion.

If you just mean you're just unclear on the first step, of laying the knot out in 2D with crossings marked over/under, that's always possible after just some ordinary 3D adjustments. Although, yeah, if you asked me to prove it, I dunno that I could give one, I'm not a topologist... (and I guess now that I think about it the "finitely many" crossings part is actually wrong if we're allowing wild knots, but that's not really the issue)