I have a loved one with dementia and my only solace is that they are much older and like the wrinkles on the skin, the brain ages too. They are still the same person; just much older and the degeneration that comes with it. Otherwise it's very difficult. What I do when they say something unintelligible, which they often do, I just say "Oh. ok" and then we move on. This is also something their professional dementia caregiver does too and we have discussed it as the best way to deal with it. Asking them to repeat what they said often leads to frustration unless it's something that we can at least partly understand.

In your case what is being said is intelligible so you may want to speak with professionals who knows certain proven techniques of dealing with it. Not that these will work for your situation but they may give you some ideas so you can discover what will work in your case. It can be very difficult but it is also very possible to manage it towards the best it can be.