This has been reported and enlisted to CDPR's bug list. I think the quest fails even you completed the objective earlier due to the fact the BlueBoy Lugos died in the encounter inside the celebration in the palace of the An Craite so the game itself recognizes it as failed because the character from the previous quest which is the Cave of Dreams died even though its not the quest itself that you are doing. Honestly it doesn't affect the game itself but for those conscious with regards to their quest completions, they will find it annoying. Though not listed to the patch notes of 1.07 CDPR told us that they will fix it.
It seems all the bugs I am not expeirencing are being fixed, cave quest failing after completing it, claywitch merchant, and the frishclow place of haunting, instead of fixing broke quests cdpr fixes quen exploding everytime you enter a cutscene...
that's exactly what happens, please CDPR fix this bug, it's very frustrating !! youtube.com/watch?v=ye3YhxTibVQ
It would have been great to know, if this erroneously FAILED quest is set to COMPLETED again when the game is patched to 1.07. This way I could at least continue to play. I did everything I can do in the game, now the only thing that's left is continue with the main storyline which would erroneously fail the "cave of dreams" quest. I'm on hold for more than three weeks now because there is no information on this issue. It would have been good to see this (and the way they intend to fix it) in the changelog.
Hey guys and gals,
This issue will be fixed with the 1.07 patch. There are a lot of smaller changes, that weren't explicitly listed in the patch notes.
Also, this will be a retroactive fix, meaning it will fix the failed quest even if you already finished "Cave of Dreams" and "King's Gambit" and have "Cave of Dreams" marked as 'Failed' in your journal.
This issue will be fixed with the 1.07 patch. There are a lot of smaller changes, that weren't explicitly listed in the patch notes.
Also, this will be a retroactive fix, meaning it will fix the failed quest even if you already finished "Cave of Dreams" and "King's Gambit" and have "Cave of Dreams" marked as 'Failed' in your journal.
Yes, yes, yes! Thank you so very much! I will continue playing right now! The waiting is over! 3,5 weeks! I'm so happy right now!
And it was! Thank you! When I loaded my old save, the whole "Failed" tab disappeared from the journal, as "Cave of Dreams" was the only quest there.