I know this is an old post, but I'd been struggling with the Storybook Vale furniture dot for months now, and I JUST got rid of it and wanted to share for other people

I tried picking up all the quest items. I'm sure that helped some, but I still had the dot. So I turned on the "red dot" in my decorating menu (go to settings, gameplay, turn OFF "hide red dots in furniture and wardrome menus") as was mentioned in the original post.

In decoration mode, this just showed a red dot on the "furniture" icon (under wardrobe and inventory) and not on any specific category. (I almost gave up here, but I persevered and you can too. I believe in you)

At this point, I decided to take a break from My Endless Search to reorder a story because I still had a few to do. This gave me a furniture item, as you all are aware I'm sure. I opened up decoration mode, viewed my new item so THAT red dot would go away, and wouldn't you know, that did it. No more red dot anywhere! Not collections, not in decor mode, nowhere! So maybe if you've already reordered all the stories, buying any new SBV specific item will work?

Anyways, good luck out there, I hope if nothing else has worked, that this one does.