This was tested in 20XX using the shield grab mechanic. Assuming that 20XX always sheild grabs on the first frame after shield stun ends, this would confirm that AC fair is not actually -1 or something. Also you don't throw any needles. The needle cancel is just a way to get the timing for the fair. It's possible that it isn't even optimal. Also hitstun doesn't work at all like you're saying, I think you misunderstand what this is lol
In regards to setups into this, I was thinking that most people consider sheik to be unsafe at that range and will try to shield grab you or wd/shine oos but if I actually can confirm the frame data on AC fair then I think that changes things a lot in regards to her shield pressure
Auto cancel fair is only -1 against shield. The reason it seemed to be +0 in 20XX is because all OOS commands for P2 act one frame slower than optimal. This is because the CPUs spend an extra frame in the GUARDOFF animation which is triggered by releasing your shield and can be cancelled on the first frame.
This is a common way to act OOS for a lot of players, many aren't aware of it probably. In one of his interviews mee2king mentioned he also lets go of his shield first before acting, shieldgrabs being an exception for obvious reasons.
Here's a Screenshot of a 20XX CPU in GUARDOFF Animation one frame after shieldstun wore off:
The optimal timing for fair, in terms of minimal air time, is on frame 17 of your jump animation or frame 20 of your jump, including jumpsquat frames. This allows for the quickest possible fast fall on frame 19(or 22).
This timing is best practiced utilizing the 20XX frame counter which you can find under the gameplay menu. If you don't know what it is or how it works, there are multiple tutorials online already.
Personally I think that AC fair -> grab is still a really good mixup used from time to time, even though it's just - 1 on shield.