No, it isn't correct. The correct form - in any variety of English - is
" I always dreamed of living in London"
'Dreamt to live' sounds as wrong to my ears as it does to yours. I haven't asked the Queen personally, but I'm sure it would sound as wrong to her Majesty's royal ears as it does to our lowly ones.
As for why the two members should make this correction, the only explanation I can think of is that they didn't notice that this part of the sentence was incorrect. Correcting learners' work is not as easy as some people think, and I often look on in horror at the so-called corrections which I see in the Notebook here, and at the glaring errors which go uncorrrected.
My suspicion is that the foreign learner (most probably a speaker of a Latin language) wrote something like:
I always dream to live in London
and the person 'correcting' the text simply changed the verb to 'dreamt' and failed to notice the error in the rest of the sentence.