The modern reading is not a refinement of the ancient one. It is a replacement, and it happened in a particular period for particular reasons.
Freud discussed dreams of dental stimulation in The Interpretation of Dreams, and read them, characteristically, as displaced sexual material, connecting tooth loss to castration anxiety and to masturbation guilt. The reading is his and depends entirely on his wider theory. It is worth naming because it is the hinge: with Freud the image stops being about the household and starts being about the dreamer.
What followed took the interiority and dropped the sexual content. The account now printed everywhere, that losing teeth expresses stress, insecurity, loss of control, fear of ageing, or anxiety about how one appears and how one communicates, has no single author. It emerges through twentieth-century popular psychology and the dream dictionary trade, and it is stated in those books without argument and without any source at all.
It is worth being clear about what is and is not known. That the dream is extremely common is well established: it appears consistently among the most frequently reported dream themes in survey research across different populations. That frequency is a real finding.
What it means is not a finding. No study establishes that people who have this dream are more anxious, more insecure or more concerned with ageing than people who do not. Physiological explanations have been proposed, including nocturnal tooth grinding and dental sensation feeding into dream content, and there is some evidence for a link with bruxism, but this is a proposal about cause rather than a decoding of significance. The confident dictionary entry is filling a gap that the evidence has not closed.