Translation:The dining room is in the apartment building.
Apparently Roman insulae lacked dining rooms. In fact, most lacked kitchens. People would eat in the ground floor tabernae in their buildings. Only the elite had houses containing culinae and cenaculae, most of which were manned by slaves or servants.
Only literal islands small enough to have a single town on them do that, and then they take a locative only when referred to by name, as the town itself would. "Insula" meaning "a generic apartment building" doesn't take a locative any more than "urbs" (meaning "a generic city") does.