I think dreams are just complete different realities with their own timelines and shit more than just being a branch of the same reality, for example there is some endings on Radical Dreamers that Lavos is not even a thing. Its interesting that Kid remember about the adventures in Radical Dreamers because Serge was a completely different person, that reality for her should be the same as Serge by the end "just a dream" but that they know it was real. A random wild theory is that at some point Serge and Kid meet with the frozen flame and wished to keep meeting and it granted their wish for them to keep forever reincarnating and meeting each other.