This is partially in response to the quote below as well as Eonn's question:
I usually only dash dance if I would be standing still otherwise. Surprisingly enough, if you just run back and forth a lot you are ten times harder to read.
Dash-dancing doesn't necessarily make you harder to read or your intentions ambiguous. If you don't mix up your options out of dash-dance then it ends up just being "moving around"; the opponent doesn't really have to read you since it's clear that you're just going to keep dash-dancing, or always do the same action out of the dash-dance in a given situation. Dash-dancing is made safe and threatening by the potential for you to use the various options you have access to (dash attack, move forwards to take their space, boost grab, dash back pivot grab, etc.) and the ambiguity of which/when/where; the dashing itself isn't what's threatening. If you don't mix up your options from your dash-dance then you don't protect yourself through its ambiguity, and the opponent can feel confident enough to just take all of your stage or hit you.
If the opponent cannot react to an option, then the potential of that option is just as threatening as the option itself, because they have to respond to it the same way (pre-emptively); this allows you to manipulate the opponent's actions through your dash-dance by using it to apply the threat of these unreactable options. Every time you move into range for an action, you apply the pressure of that action and force a response out of the opponent. This is part of what allows you to bait the opponent into attacking you when you dash towards them (which you can avoid by dashing away); not only are they wanting to take an opportunity to hit you (moving into their range enables them to), but they're threatened by the potential of you hitting them when you enter your attack's effective range and want to stop you before you can do so.
Every action you do should have a purpose; moving isn't inherently good and lack of movement isn't inherently bad. The principle of establishing threat through ambiguous option choice applies when you're standing still or walking like it does during dash-dancing. One of the important differences between standing/walking and dashing is that during a stand/walk you have immediate access to all of your standing options at all times, whereas while dashing you restrict some of your options (no grounded attacks apart from dash attack and grab, no way to stop moving immediately apart from shield-stopping), but because you're already moving you can potentially cover/move through more space in a given amount of time compared to what you can from a stand/walk, and you can change direction more quickly/frequently (both of which make your position more ambiguous). Wavedashing allows you to move along the ground and have access to your standing options at the same time, but you don't get them immediately like you do during a walk (you have the duration of the jumpsquat + 10 frames of
LandFallSpecial before you can act).
Sheik will be using a lot more walking and wavedashing over dash-dancing compared to many other characters because of how reliant she is on her tilts (meaning she needs to keep access to them often) and how short her dash is. A dash has the important benefit over a wavedash in that while it's approximately the same length (in Sheik's case), it allows you to grab nearly instantly after you initiate it. A dash also starts moving sooner, so is more applicable in situations were you have to narrowly avoid something (it allows you to commit to moving away later, and therefore increases your effective reaction time).
Sheik has extremely good ground moves (and good moves in general), which means that just her being near you with access to these moves is very threatening. One of the important uses for dash-dance or wavedash back is catching out the opponent trying to punish you for using your moves (or preemptively stop you from using them). For example: one of the ways for the opponent to beat you walking forwards and up tilting (or forward tilting, or down smashing, etc.) is to hit you; moving backwards out of range of their attack instead of attacking yourself allows you to punish them for that (with a dash-dance grab, for example). Moving like this is also relatively safe and non-committal; even if the opponent doesn't take the bait and attack, all you've done is move backwards a little bit, which leaves you in a position to continue applying pressure. So long as the threat of your moves is present, then your dash or wavedash back is potentially covered by those moves, and therefore it's not entirely safe for the opponent to punish it. In reality there's a lot more that goes into it since you have to take (amongst other things) your opponent's other options besides attacking into account, as well as the way that certain options cover several things at the same time; but the concept and example still stands.
When you should be trying to bait something with a dash-dance and when you should be trying to bait something with a wavedash is complicated. A lot of it is based on what you want to punish with (since each restricts/allows different options).
