I’ve always thought this dance was useless, but I decided to give it one last try. Last night at the Dion siege I use Dance of Protection (Temporarily increases party members' resistance to terrain damage. Continuous dancing consumes additional MP. An equipped dual-sword weapon is required to use this skill) and I was still slowed by the trrain effect in the castle. The only possible use in the game and its still pants. Sorry just venting I just could have used the 580k SP more productively. Oh well, Dance of the Vampire FTW.
It also lowers the chance of damage and status debuffs in certain areas. You will get a small icon near your buff bar that says you are in hazardous terrain. The dance is not 100% reduction of this, it simply increases your defense to it by a certain %. You can still succumb to the effects in these areas, but you have a much better chance of blocking those effects.
It was only bad luck on your part that you were still slowed. I happen to like that song in places where both damage and status debuffs occur from terrain. It helps out long term.