How can she form a new memory in such detail, but can't remember old ones?

My FIL has LBD and my MIL has mild dementia. My husband and I have been oddly comparing her to him and realize that her 'forgetfulness' is worse than we thought. She's begun forgetting things she's always known how to do--most recently, how to use their remote control for their TV. She claims it's new and that the TV belongs to the facility they live in. Not true. They've had the TV for 10 years. I tell you that story because she's recently been telling a story, over and over again that we feel certain was a dream. She tells it to anyone who will listen as though it were real. (She woke up in the middle of the night to find Dad not in bed. She saw the light on in the bathroom. Got up and found that he was taking a shower. She got him out of the shower, dried, dressed and back to bed). There's more to the dream, but she repeats it EXACTLY the same way every single time. Like she's memorized it. BTW, we know it's impossible because Dad can no longer walk, dress/undress himself and there's an alarm on his bed to alert staff when he sits up in bed. This facility is a dream as far as caregivers and owners. It could not have happened. I understand her losing memory of things she formerly knew how to do, but how can she be forming new memories?