All four of the people came out of the dream realm after their death there. After coming out of this dream realm they would only remember little things about the life that they had lived inside it. Dreams were called fleeting for a reason and remembering a completely different life was also not good for these disciples mental health.
All four of them had done whatever they wanted in the dream world and seeing their natural personality Huanlong had already chosen a successor for him. He then started to call all four of the participants out one by one to have a solo conversation with them.
The first one he called out was the prince. Huanlong told him that he was rejected and even told the reason why. As the real Huanlong was already long dead, this soul fragment had nothing to pretense. It directly told the prince that there was a high chance that he would not use Huanlong's techniques as his own and that was what Huanlong did not want.