> you haven't played enough to recognize the difference

I think the key bit here is that this is aimed at someone who is proficient, but not "good" ie can play tab, but not much else.

I think its perfectly possible to transcribe if you don't "know" musical theory, but for guitar, you should need to know chord shapes.

The key or mode is probably not actually that important, because you are transcribing rather then improvising. Obviously it will reduce the search space considerably if you do know what key/mode its in.

But you'd be surprised at how much musical theory is innate, or at lease learnt through listening.