In the book "Why we sleep?", Matthew Walker suggests something similar. That dream sleep is fundamental in making associations. In this case, generalizing and getting rid of overfitting. He talks a bit about problem solving when sleeping and how this leads to "a-ha" moments when waking up.

This means that the idea in this paper is already "out there", contrary to what the abstract states. But it's exciting to have a framework to talk about it quantitatively.