It's the setting of Dream Radar's gameplay. When you hunt Dream Clouds, you will be taken to this location; clearing all clouds from the area will automatically end your session.
"Interdream Zone" sounds cooler than "augmented reality using a weak 3DS camera", which is probably why it has a special name.
Interdream Zone (Bulbapedia)
>They appear in the Interdream Zone that exists in the space between dreams and reality.
Basically, a space between dreaming and reality.
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