You can, of course, use the
FOSW▸ Rover on its own in this area:
http://www.nationalrail.co.uk/managed/promotions/pra7ebd70a04000400ab63191d753a5b/areaMap/Freedom_of_South_West.pdfSo absolutely fine to use it on the Night Riviera between Penzance and Taunton (seated - Sundays excepted*) or vice versa.
However, should you wish to use the Sleeper beyond Taunton, you can use your Rover in combination with a walk-up ticket to/from
Taunton** (if the Night Riviera is on its usual route). You still need to pay extra if you want a berth.
*The Sunday Sleeper doesn't call at Taunton, so you can only use your FOSW Rover from the south-west as far as Exeter St Davids.
**It's also potentially possible to use a FOSW Rover in combination with a ticket to/from
Westbury, but this option is a bit of a grey area. Using a FOSW Rover in combination with a walk-up fare to/from Westbury is possibly allowed under the terms of the
National Rail Conditions of Carriage (para. 19 part (c)). The Night Riviera doesn't call at Westbury but the combination of a 'Leisure Travel Pass' (which is what the FOSW is) plus a walk up ticket precludes the need for the service you are on needing to call at the point where your tickets split. Whether the Westbury avoiding line fulfils this criteria is open to debate.