Ya know, this bug is still a bug.
And... I thought I'd resurrect the thread cos I actually did mean to post the answer to the question way before.
But anyway, the thing is, now we aren't nailed to the spot, the end of some of the dance moves is not in the same place as the beginning. And yes, this affects your collisions zone/bounding box thing. And yes, it's completely repeatable every time.
E.g. Fly off the ground a little ways and do the 'sideways shimmy' type move - I think it's F11, but not got access to SL just now. You will find yourself about 2m to the right of where you were.
Now try moving forward slowly. What actually happens is that you move in an arc, with the center 'pinned' to where your bounding box is - where you started the move. You will find you can go right thru other avatars, but they will hit the invisible you to the left.
However, they do focus on your avatar, not the bounding box.
If you laugh or land, you will reset the position of your avatar to match your bounding box.
Don't worry too much if you don't want to fix it... you can do some 'interesting' things by playing round with this...
(cue Lindens fixing dance bug (since anything 'interesting' we've been able to do with our avatars they've slowly been breaking for us so we can't!)

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