I have no problem with dreams or fantasies in this type of game, but to me the best use case for them is to get some "fake" sex scenes in there for characters that are going to be a slow burn. So for the easy conquests there's not much point in a sex dream, you're better off doing a real scene. For someone you're not going to get to fuck for real until like 3 years into development, that's who you want a few sex dreams for. So I can understand why he's doing them in this game. The problem is that's pretty much ALL he's doing. There's no real progress with anyone (as of the last version I played, haven't played the new one yet).
I can also understand why a dev might do it, which is why I mentioned it, but still I don't think there's a good reason to do it. In my opinion it sacrifices too much for too little payoff. Granted this is subjective, what works for you might not for me, but a huge part of the appeal for adult games for me is the steady ramping up sexual content with each character. Dreams/Fantasies kill that aspect of the game. It's like going to see a film and being shown the how it ends within the first 10 minutes or skipping to the last season of TV show. Most of the entertainment and excitement comes from everything before that, the journey of how you get to the end game content. I would happily and preferably wait patiently for that payoff.
It's also not as though that there aren't alternative solutions to tide over or throw a bone to those who don't care about the build up or aren't as patient. Most of these types of games will typically have a side character, or one main character who you can progress through faster and access sexual content early, which is a much better solution IMO as you get to have your cake and eat it too. Kira effectively served that function in this series and Alice had a quicker progression than Lisa or Ann. Another solution is to focus development more heavily around one character at a time. I'm not necessarily saying those are the right or only solution for this game, only that there are other options that don't spoil the content before it even gets going. Throwing the fantasies in just comes across as a ill-advised attempt to stave off critiques (it could also just be a creative choice, we don't know) and judging by recent comments it's not working.
PS: For some added context, I've been following this game since it's first release and have largely agreed and supported the dev's decision to restart the project due to technical debt and think people who are being critical of the length of the development cycle largely don't understand just how much work and time this sort of project takes, especially for such a small team. Having said that I have been and remain quite critical of some of the decisions that have been made since the reset, especially in regard to the visuals and rendering. The project saw a real dip in quality compared to the first iteration's visual fidelity, although recent screenshots for this update suggest there may be some reason to optimistic on that front, we'll see when the update goes public.