I think the punchline is the fact that it was a dream in the first place, while also continuing the running gag of the fairytales popping up every so often.
Not much to look super deep into, just a filler chapter with no plot that just covers the ongoing silliness and almost despair of the other characters not understanding the current on goings of the current plotline.
Something something, don't think, just read.
Either way, this has been a fun read, dunno why I held off on giving this a shot, but damn, glad I did.