A few months ago, I finally sold all the duplicate dragons that could not be traded. I kept them at level 4 for a while hoping it would change. From what I gathered at the time, Storm8 originally made them non-tradable for a reason and just never bothered to change it. I think it is a throwback from when they were traded for gems and I can't recall now the reason I thought they made them untradable but yeah....my theory is they were purposely non-tradable and when the switch was made from gems to essence, those particular dragons were never switched as well.