I LOVE Alien 3. I absolutely adore Alien 3. Despite that, I am in no way bothered if they want to go, "Oh it's a hypersleep dream" and write it out of continuity. They could even have some of that Prometheus dream footage of the events of three and four on some monitor to show what's going on. it's fine.
Because, they're artworks, and that's all they ever were or will be. Any continuity is already shredded by the egg on the Sulaco and the different cryotubes and all the rest of it. A new take doesn't erase the old, and these things can be enjoyed in tandem. They're not a real world, it really doesn't matter if people want to go in and muddle with bits, provided they create something wonderful out of that. Colonial Marines is grim because it was rubbish, not because of what it set out to achieve. Likewise Isolation is brilliant, because it's brilliant. It's easier to accept the timeline addition because the piece as a whole is so wonderful.
But look, until someone explicitly says "Michael Biehn is in this film, playing the same part he did in Aliens" I think assuming that it is all retcon is a bit premature. That was just some concept art, potentially from before he shared the idea with Weaver. It could easily all be set after A:R yet.*
(To let Michael Biehn actually get his due in a film the filmmaker really cares about would be nice after all these years, though. I'll feel pretty bad for the guy if all this speculation leads to yet another, "sorry Mike! see you in the B-pics!".)
EDIT: I hadn't read the full quotes at the time of writing. The full bit does suggest the retcon more than I realised, so while I'm still cautious to call it fact, it does seem likely.
"I want this film to feel like it is literally the genetic sibling of Aliens,
so it's Alien, Aliens and then this film"
http://comicbook.com/2015/02/26/neill-blomkamps-alien-movie-will-be-a-sequel-to-aliens/