IDK for sure but the first time i fought the south dungeon dragon (like 30 updates ago) my team was really high level, taking almost no damage when it attacked (Meaning the balance of power leaned heavily in my favor. Still couldn't DEAFEAT the dragon. the idea is that once it realizes killing you will be too difficult, it gives up and leaves.
PS I also figured out a map exploit to get to the south dungeon and unlock that character, even before the coronation event. It's possible, though difficult to survive with a party at level 8-10ish