The Dream Tree pulls the consciousness of everyone in the targeted area inside it.
Thereafter, its prisoners would be forced to fend against Qantal's imaginary beasts while protecting their dream cores.
Each dream world worked like a separate dimension. If your dream core breaks or you die while trapped inside the Dream Tree your soul perishes.
In short, you die.
But if this was all. I wouldn't have called Illusive Dragon invincible inside the Dream Tree.
Dream Tree was a unique skill that targeted 'everyone' inside the range. And that includes Illusive Dragon too.
It was a complex skill with its own ups and downs. But as the skill holder, Qantal has managed to master the skill.
He can ignore the negative consequences of being caught in Dream Tree while only reaping the positive parts.
As a result, he has almost infinite strength inside the Dream Tree.