Because the nether dragon is an ethereal creature, only existing in a physical form if it is bound to another creature, they can live inside their host in a gas like state.

This is a common thing to happen if they are ever injured or their physical bodies destroyed. Recovering in their host and regaining a physical body through spilt blood. They can also heal any internal injuries to their hosts body while inside them.

I've tried to draw this idea before but it hasn't worked out so well...