So they were OK with the actual rape by deception of the PC but not the squickyness of the demon using Leliana's form? Odd. But glad they got rid of it, anyway.
I thought that's where he was going with the post to begin with, honestly; as uncomfortable as actual Leliana would be about the idea, the PC seems like the biggest victim in that situation. I suppose out-of-game though, the player probably knew that it was a dream by that point --the multiple "something isn't right" dialogue options before that point would tell them as much-- so the choice presented to the player then was more along the lines of "Have sex with fake Leliana; yes/no", which is probably what he's referring to.
As much as that sounds like exactly the kind of thing a demon would do in-universe, I'm not sad it was cut, although the whole "It was all a dream" part sounds like it could've been pretty cool depending now how seamless the transition was.