no this is incorrect for me. If I apply this ointment there is no "dead skin", the skin will simply be wet in the morning. It dries up to look like normal lips about 30 minutes after I wake up.
For me the reason they crack is only partly from dryness. However it is mostly because of the need to move my mouth. If I smile no matter how moist the are they will form two cracks usually mirroring each other on the bottom and top lip. Why? because the lip is trying to heal as if it is a part of the skin that does not move. So it heals to that shape and I break the shape by moving the lips.
It is super easy for me to sleep on my back and sleep with my mouth open the entire time. Yes I do want to rollover and smash my face in the pillow and yes I want to go on my side but alas I cannot. You get accustomed to it pretty quickly.
I will also add that when I use a product called 'dragons blood' I wake up with no white at all in my mouth, even if I sleep with my mouth closed. The product seems to keep the lips moist and dry at the same time. Not sure how this works but this is what my experimentation shows.