Yeah, he's been saying this stuff for years. Certainly it's true that Catholics and Lutherans are divided. And those who call themselves Christian are divided among themselves.
But that's not what he means. He's simply reiterating the new Vatican II subsistence ecclesiology. Ratzinger considers Protestants only materially divided from the Church (at least now that several generations have passed since the original "reformers"). Since they are baptized, believe in the Holy Trinity and the Incarnation, and sincerely think they're following Christ, they're really part of the Church, even if materially divided from Her. Ratzinger in one of his works speculates that these conventicles of the separated brethren have assumed a different nature now that they're all just materially divided from the Church.
Hmmm. Where have I heard that kind of theology before, where people are materially / visibly divided from the Church but formally part of it due to their sincerity, good faith, and following of their consciences? Oh, yeah, that's right, from 98% of Traditional Catholics. So, yes, the Church WOULD in that case be formally / invisibly united and yet materially / visibly divided.
Folks, SUBSITENCE ECCLESIOLOGY flows DIRECTLY and QUITE LOGICALLY from the false implicit BoD promoted by most Traditional Catholics.
So ... if you believe in false implicit BoD (i.e. implicit faith), then no, this is not the least bit heretical or erroneous; in fact, then, it's quite true.