It doesn't get stronger AFAIK, and the Armor kicks in when Pac eats the big pellet IIRC
This is incorrect, It will do more knock back and damage the further it goes. I shall explain my thoughts on Side-B however.
Side-B is the highest risk/reward move Pac-man has. It has its strongest use as a laggy move punish and kill move. When fully extended it kills the heaviest of characters around ~150% onstage and offstage can kill as early as 70-80% for most characters. It has 2 stages. but quite considerable end lag, making whiffs incredibly dangerous.
The first stage is where Pac-man is most likely to have mistakes occur with the move besides the end. Not only is he vulnerable while doodling the line, until he hits the power pellet he is at the whims of his opponent. In a close range situation, one well placed jab followed by a shield will negate any power the move would have. If you plan on using it closer, try to loop away or up. While drawing you also can freely form the line, you can also do sharper angles while in the air. In my opinion is stronger to short hop then side-B unless you will miss the attempt to strike if you try. If you draw your line while onstage straight while standing, you will not go offstage and be trapped at the ledge. To avoid this, angle up slightly before the line ends so you go offstage or in a way that allows you to keep moving.
Once you let go or it goes the max distance, Pac-man follows the best path he can to the pellet. Things like slopes and walls influence how the line is formed, so you are going to flow with the stage normally. If the angle is somehow too sharp, you may collide with the stage and go into a tumble that cannot be cancelled or you will zig zag and still go on your way. I suggest avoiding too many odd angles into ledges for that reason. If you also draw in such a way where the line goes past a ledge, but pac-man would still collide, you will then go into a tumble that basically means your death if offstage. if you hit Your opponent in this first section before the power pellet, you will do 4-5 percent based on how many pellets you have eaten on your way to the big pellet.
Once Pac-man reaches the larger power pellet, the move goes into Form 2. He grows larger, gets Super Armor, and launches much much further. The attack does as little as 6%, or at full length 12% Damage. Its knock back increases according to length as well. So the longer you can make it safely, the more effective the move will be, however, it is also more likely to be avoided.
The move does combo into itself around ~20-30%, basically the lower the percent, the shorter you want Side B to be if used close ranged. It also maximizes its kill potential as it is a true combo that once the first hit is made, there is no escape. You want to try to aim it to get both hits out of your side B so you can link the weak but fast hit with the big but easily avoided kill move. If you are unable to do that, you still want to try to get them as close to before the big pellet as possible at further ranges. If done correctly both hits should connect one after another and hit very hard for a max of 17%. This maximizes the kill potential of the move.
So what applications does it have?
It can be used at a sharp loop to break the hydrant, as long as both hits connect, the Hydrant will launch.
It has obvious use as a recovery move, but even stronger use as a edge guard. You may bait an air dodge and lead it in such a way to catch them in end lag, or an attack that your super armor will eat and you get a KO.
It has some minor mind game interactions with trampoline and hydrant. If not punished, you can follow up the end lag with either attack.
You can immediately use it after a dash attack, like most of Pac-man's moveset.
You can follow melon with it. This is of questionable use because a dash grab, or other options chasing melon are much safer and more effective.
It is definitely the weakest move when it comes to variety of what you can do with it compared to his other specials. It is best used as a kill move, punish move, or combo finisher.