If it were me (and I'm a novice at this, but I do tend to think differently from others) I wouldn't disassemble it. I would repair the embroidery through both layers and either add a new backing over the original and use the tie method to attach it, so it looks neat without destroying the original quilting; or I'd simply get it into the best shape I could and use it as a wall hanging. I probably would replace the binding, as you said it is falling apart. But, and you are welcome to disagree, the hand-quilting is what makes it extra special. Often, the embroidery is from a pattern you might see elsewhere, but the hand quilting is the true beauty and uniqueness.
I suppose it depends on what your goal for the quilt is
Hope you share the end result with us.