It's like a Fountain of Youth habitat. So, for instance, if you grow a dragon to a higher level and don't like the way it looks, you can put it in this habitat and it will become a cute little baby again. That's all.
Originally Posted by FlatFoot
Correct, it's a Fountain of Youth-like habitat. Doesn't matter what dragon you put in it (as long as typing is correct) it'll appear in it's baby form but maintain all level and stage growth. It's just for fun, making them look like babies again if you want. Also it holds more than normal if I recall.