The OED has two definitions of "dredge". The first refers to dredging a river, seabed, etc. in search of shellfish, oysters, etc. The second is to sprinkle flour/sugar/cocoa on top of something.
Personally, I think the BBC got this one wrong. All the origins of the word go back to middle English, old Dutch and even Norse words for dragging the bottom of a river, etc. to remove items.
However - it seems to be common (British) English usage for sprinkling sugar or something else on to a cake, biscuit, etc.
In etymological terms you are correct. But this is word usage and the term dredge is certainly used in the UK to mean dusting. A 'dredger', is the culinary term for a utensil with holes for shaking flour or sugar over food.