When Rose came in, I thought the same thing. But unconventional wisdom suggests several good reasons for playing Rose there at that point.
Rose has better wheels than Dier, thus quicker at getting amongst Real's playmakers with the ball and disrupting service to the Real attackers. Plus the threat he'd pose on a counter attack would be greater than Dier's because of his pace, which might also have served to keep some of Real's backline from coming too far forward to increase their pressing. If Rose had any issues with his knee, better to have a break down in midfield than on the last line of defence.
In time, I'm sure we'll see Rose prowling his everyday beat on the left, but this was a great illustration of Poch's creative approach to making more flexible use of his players.