I figured this out in the end and I thought I would drop a couple of lines here in case someone has the same problem.
For me dreams will not trigger if when I long rest a cutscene triggers or a companion wants to talk to me. Before I use the tadpole, I have to long rest as many times as it takes to go through all queued events. After I've done that, I can use the tadpole and actually trigger the dream. Basically, I need to camp compulsively before every tadpole use.
