There are several issues with the Dancing Lights cantrip. Some of these are bugs, others are rules and some are feedback, so I wasn't sure which topic to put it in! I'll list the issues I've found so far with Dancing Lights and add any more if I find them:
1. Dancing Lights cannot hover and therefore cannot move between platforms. If you cast Dancing Light on a platform with no way to path to another platform, it is stuck there. The tabletop rules state that the lights hover so this shouldn't be an issue for it.
2. Dancing Lights should technically create 4 separate lights. Currently, it creates one light with 4 animated lights inside the model. The tabletop rule state that there should be 4 individually controllable lights. This change reduces it's power by a bit. If it's too much trouble to have 4 controllable lights I would suggest buffing it to cast Bright Light as opposed to Dim Light in order to balance it. This would make it a shorter range, ranged Light cantrip which requires concentration which seems like a fair compromise between the two cantrips.
3. The spell description for Dancing Lights says something like, "Summons Dancing Lights" without ever stating the stats of the dancing lights. This should probably be added for those unfamiliar with the tabletop game.
4. UNCONFIRMED - Dancing Lights potentially acted as an ally for the purposes of Sneak Attack. I need to test this again but thought I'd leave it here in case anyway else has seen this.
I came from what I'm guessing is the same spot as Ragnarok, the second time you fight the lizard men after you spin the walkway. I agree with the idea that the four lights together should make bright light and each light if you can separate them should be dim. Moving them over gaps also makes sense as they hover. What I did come across is when I tried to recast the lights because I couldn't move them to another platform the spell failed and I was left with the first cast of dancing lights on the first platform.
Here is the PHB for dancing lights
You create up to four torch-sized lights within range, making them appear as torches, lanterns, or glowing orbs that hover in the air for the Duration. You can also combine the four lights into one glowing vaguely Humanoid form of Medium size. Whichever form you choose, each light sheds dim light in a 10-foot radius.
As a Bonus Action on Your Turn, you can move the lights up to 60 feet to a new spot within range. A light must be within 20 feet of another light created by this spell, and a light winks out if it exceeds the spell's range.
This also leads me to disadvantage to melee attacks from characters with darkvision.
I've just used Dancing Lights next to an enemy who was unlit and it cast them in Bright Light, so perhaps it is casting Bright Light as opposed to Dim Light. A tooltip to describe how this version of Dancing Lights works would be great because I'm confused now.
when I tried to recast the lights because I couldn't move them to another platform the spell failed and I was left with the first cast of dancing lights on the first platform.
Hi ! Same problem here even after todays major update : the text says "you will lose your dancing lights if casting again" (or something like this) but in fact it let the previous dancing lights where it was and you lose your turn as if you had cast it :/
F : le sort "dancing light" devrait disparaître si on le relance (chose que l'on fait si le sort précédent est bloqué sur une plateforme par ex) pour pouvoir être remplacé par les nouvelles lumières dansantes. Pas de bol : non-seulement nos anciennes lumières dansantes ne disparaissent pas (et restent donc coincées) mais en plus on perd notre tour car le jeu considère qu'on a lancé un sort.
For dancing lights... before you cast it again there should be a little button on the character portrait that you can click on to stop concentrating on the first one. Click that, which I believe is a free action, then you can cast another one where ever you like. I do believe it should hover over gaps or whatever, hover is just a slow 'fly' as far as the spell goes. Four different lights would be very time consuming even if accurate. Perhaps a button to enlarge the configuration? That would be cool and simple. Just my thoughts.
Dancing lights casts 2 squares of dim light and 2 squares of bright light (Tooltip should state this, but it doesn't).
It does act like a character for flanking and disadvantage purposes as you suspected, which is silly. Not only does it work for sneak attacks but it also gives disadvantage for nearby archers "An enemy is nearby" which I found quite funny :p. In the encounter just before the last boss of Dark Castle, in the room where a couple of archers and mage are I put dancing lights near them so I could snipe them down and noticed them all running away from the lights because of "an enemy being nearby".
In the library when the spiders attack I had dancing lights cast, it was right next to the wall. There was a spider on the wall one square off the floor and dancing lights did not illuminate the spider, as when I tried to attack it I was still at disadvantage because it was in dim light.
Devs address changes to Dancing Lights and the distance it illuminates in this thread.
https://forums.solasta-game.com/forum/ruleset-differences-with-dd-5e
After the winter update. In the fight with Akasha, her hovering directly over the dancing light spot, yet for attacks were listed as at disadvantage for her being unlit. Also humorous, since she was on fire from my paladin's channel divinity.