You don't need to create a new phase for this, the Templater system has filters to enable you to do this. I'm going to take your example literally, but it's worth noting that the "unknown" phrase is already in title case and its default value is "Unknown".
To make the first character upper case:
Code:
{{ phrase('unknown')|to_upper('ucfirst') }}
To make the first character lower case:
Code:
{{ phrase('unknown')|to_lower('lcfirst') }}
You can remove the 'ucfirst' and 'lcfirst' arguments there if you want use strtoupper and strtolower respectively which are the default values. The "to_upper" filter also supports using 'ucwords' to make an entire phrase title case.