Dreaming is being used here as an analogy for a post-hoc conflict resolution process for memory (which is part of the theorized purpose of dreaming in the human brain), rather than used literally. I think it's the best word to describe what it does and it is very important to a good memory system, as memory conflicts are one of the most likely things pulling down their performance in the long run. Not really a misnomer, imo, and i don't think they are trying to use the word to suggest that Claude is conscious.

It is incredibly unscientific. Superstitious, in fact.

I wouldn’t be particularly surprised if Anthropic were to reconstitute itself as a religion.