Verse 4

4.  Therefore,  again,  the unreality of entities in the waking state is,  for the same reason,  also unreal,  from the location within of the entities.  That is,  the location within of entities there,  in the waking state,  so in dream.  But waking state and dream are not the same;   dream differs from the waking state owing to its being characterised by the state of being enclosed.

With this verse Gaudapada starts into the major premise or argument of this chapter that entities perceived in the waking state are also as non-existent in reality as they are in the dream state.
Most reasonable persons it would seem accept the arguments given in verses 1-3 above for the unreality or lack of true existence of entities perceived in the dream state.  In fact one might say the reasons given were tedious,  unnecessary and too obvious,  the unreality of dreams is a common sense.
Gaudapada's intention in stating the basic reasoning for the entities perceived within dreams as being unreal is for extending this reasoning to demonstrate that the waking state is also subject to that very same reasoning which exposes illusions of perception.

"Therefore,  again,  the unreality of entities in the waking state is,  for that same reason,  also unreal from the location within of the entities there".

Here Gaudapada is speaking from the fact of perception as being from within,  that is,  as dream entities are perceived from within so also are external entities recognised and perceived from within.  The premise is that although it would be said that in the waking state the entities perceived are real because the senses tell us they exist independent of us that is the only difference between perception in the dream state and perception in the waking state.

"in the waking state,  so in dream".

In the dream state they are seen in retrospect to be internal,  and for that reason only they are accepted as being unreal.  In the waking state they are experienced as being external but this is the only difference,  because in reality the waking perception is still from within an enclosed  (and unreal)  conscious  "state",  as it were.

"But waking state and dream are not the same;   dream differs from the waking state owing to its being characterised by the state of being enclosed".

So,  it is natural to attribute reality to unreal object of perception.  the error in the case of dreams was only seen later by the application of logic that was available only after waking   (entities to large to be contained internally and distance and location).
The only difference with perception in the waking state is that the waking state cannot,  within creation,  be examined or understood in retrospect.  This means that errors of perception seen in the waking state will persist in living memory,  as it were.