Board Thread:Lore Discussion/@comment-744426-20150730192441/@comment-744426-20150730200402
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Yes, I would agree with that. I think that seeing Trace lying passed out at the base of a Rusalka body is strong evidence that he is in a dream-like state. We also have nothing to suggest that Elsenova has the ability to "send him back to Earth" and when she says "We have taken care of it", this feels like a lie and a hand-wave (do not look behind the curtain!). But we do know that Elsenova can subdue Trace at will, and it is suggested that Veruska can create dreamlike worlds.
Finally, the note Axiom 1 (was also in the trailer) points to the dream world being an important concept in Axiom Verge.