doesnt that defeat the purpose of 'random' dungeon...
Of course not. "Random" is entirely unrelated to the number of options (even if there's only one option, though that's splitting a very fine hair). You can randomly choose one of two dungeons, or one of five dungeons, or one of all the dungeons. And the random dungeon tool absolutely allows you to do this.
As kargen27 mentioned however, if you prune the list in any way, you do forfeit the experience bonus and Undaunted reward bag.