Thanks for the feeback and glad your daughter loved it, she was actually part of our target audience after all!
And you're right that's something most people struggled with; including us! We wanted to have a way to hide from the dog even after it starts chasing after you, but we also wanted to avoid too many explicit tutorials. I think what may have been better would be to have a level with the hide spot and the dog in the same level, with no way to progress BUT using the hiding spot, in order to make it a little more obvious. Another thing Zackavelli said on the stream was to perhaps make it a different button to reinforce that it doesn't have anything to do with making a mess.