Probably it will be as it was speculated: that child/thing/character is clearly Miquella (a man apparently) and the realm is the dream realm or whatever it's called. Cut content found in files, cut items, cut quest and dialogue relating to sleep, dreams and a sleep dew potion the player can make.
Anyway, what's incredible to me is that after all these years From still makes DLCs about some of the most retarded, insignificant, less cool aspects of the lore. Like who the fuck cares about Miquella and his dreams?
Motherfucker I want a DLC where we get to fight, kill and absorb the powers of the Rot God, Greater Will, Formless Mother, Blood Star, Dark Moon, Frenzy Fire God (the madness and Fire Giant god), Dragon God and all the other Outer Gods, travel to an alien city where you get to learn more about primeval current, glintstone, fight entities like Falling star beast, Astel, maybe add swimming and an underwater city with sea bosses. Just some ideas.
But nah, Miquella.