What I'd be curious to know is how a dream of the dream machine within a dream works like an actual dream machine.
The same way a car works in a dream like an actual car. (In that I get in it, operate it and it takes me places.) If I know how it works, or should work, that's how it behaves in the dream. The "dreamers" are able to so control their dreams they're able to allow it to work within the dream the way it's supposed to work in the real world.