A fundamental unit is not always the smallest component of a system.
In some sciences, the smallest entities also serve as the most useful explanatory units. Atoms help explain chemistry, and elementary particles help explain many physical phenomena. Biology is different. Living systems are organised across multiple interacting scales, and the smallest components do not always provide the most informative explanations.
Genes, cells, organisms, species, and ecosystems can all be biologically important without occupying the same explanatory role. A unit may be structurally fundamental, evolutionarily significant, or explanatorily central depending on the question being asked.