Nightmare (the dungeon) took over him and was trying to give him this perfect life image while it sucked out his power or life idk what to call it but he felt something was wrong with it. He snapped out of it at the end.
To continue to that reply above mine
In the past, Nightmare restrains the opponents with their trauma and drains their energy but now it's a parasitic-type dungeon. Taegun being the host, got attacked by Nightmare and his energy is being drained by it. I guess you can say that to distract Taegun from acknowledging it, he's being shown a dream where everything is "perfect", as we saw in this chapter, Taegun managed to snap out of it and came back to reality!
I’m confused did he lose his memory, maybe I have to reread but im too lazy rn