Chapter 1892: Here

He still didn't quite understand. But he knew he had yet to reach his limit. 

In the end, Dyon didn't actually believe that his Perfect Fusion Meridians were the result of him being more talented. Actually, he believed he was born with Star Grade Fusion Meridians. However, his integration with the Sovereign Flame is what evolved his meridians! 

As for why Little Alauna also received this benefit, the answer was obvious. When a child between a Heaven's Child and another species was born, that child would become the absolute greatest version of whatever the non-Heaven's Child parent was. 

Simply put, Alauna didn't evolve due to the Sovereign Flame, obviously, because Dyon hadn't had it when he impregnated Luna. She evolved thanks to the Heaven's Blessing.