Dancing one associates with a low bar (5)
I believe the answer is:
limbo
'dancing' is the definition.
(limbo is a type of dance)
I cannot understand how the rest of the clue works.
Can you help me to learn more?
(Other definitions for limbo that I've seen before include "Indeterminate state" , "Place of uncertain waiting" , "Pole dance" , "Steps beneath bar" , "Medieval Christian abode for unbaptised souls" .)