Ideas
Sorry, I had no access to my pc recently and couldn't test with your question in mind, it doesn't work with most dance floor as far as I've tested, it happened in new saves, the sims talked to each other to do the dance battle and then nothing happens and npcs are swarming the dance floor. I think there's a conflict between the action of exiting the dance floor for npc to let sims dance and the automatic go dance interaction in nightclub when sims are coming to the lot because my sims always battles to have them exit the dance floor but there's always an npc that ends up coming back to dancing while the dance battle is supposed to happen so my sims considers there's no space for the interaction. Though it also happens when no sims try to get on the dance floor and the actions cancel itself, but I've mostly seen npc being an hindrance by coming to the dance floor when they are supposed to make place for the battle