Praise be to Allah.
The hadeeth mentioned in the question was narrated by Ahmad (2/213). It was not classed as saheeh by Shaykh al-Islam Ibn Taymiyah (may Allah have mercy on him), as far as we know from the books that we have to hand or the books of his companions. Moreover, when did these Sufis give any weight to Shaykh al-Islam Ibn Taymiyah, such that they would accept his opinion and verdict on hadeeths?
There are two problems with the hadeeth mentioned in the question:
One of its narrators is unknown, namely Haani’ ibn Haani’.
Al-Haafiz Ibn Hajar (may Allah have mercy on him) said:
He was mentioned by Ibn Sa‘d in the first generation of the people of Kufah. He said: He was a Shi‘i. Ibn al-Madeeni said: He is unknown. Harmalah said, narrating from ash-Shaafa‘i: Haani’ ibn Haani’ is not known, and the hadeeth scholars do not regard his hadeeth as sound because his status is unknown.
Tahdheeb at-Tahdheeb, 11/22
Abu Ishaaq as-Subay‘i deliberately used ambiguous words in order to mislead (tadlees).
Abu Sa‘eed al-‘Alaa’i (may Allah have mercy on him) said:
‘Amr ibn ‘Abdullah as-Subay‘i, Abu Ishaaq, is well known by his kunyah; we have stated previously that he often deliberately used ambiguous words in order to mislead (tadlees).
Jaami‘ at-Tahseel fi Ahkaam al-Maraseel, p. 245
The hadeeth was classed as da‘eef (weak) by the commentators on Musnad al-Imam Ahmad, 2/213, 214. They said:
Its isnaad is da‘eef; we have stated previously that Haani’ ibn Haani’ and others like him cannot be accepted when they narrate hadeeths tha are not narrated by others. The word “hop” in the hadeeth is objectionable and odd. End quote.
Even if we assume that the hadeeth is saheeh, it does not indicate that they danced in a circle of remembrance (dhikr) of their Lord – Allah forbid. Rather it indicates that they expressed their joy at praise from the Prophet (blessings and peace of Allah be upon him) by hopping on one foot, which is an action that is permissible in and of itself. Rather the ruling concerning it is connected to the reason for their joy. Allah forbid that any of the wise would quote this as evidence for dancing when remembering his Lord, may He be exalted.
Al-Bayhaqi (may Allah have mercy on him) said:
This – if it is saheeh – indicates that it is permissible to hop, which means lifting up one foot and jumping on the other, out of joy. Dancing that is similar in nature is similarly permissible. And Allah knows best.
As-Sunan al-Kubra, by al-Bayhaqi, 10/226
The Shaafa‘i faqeeh Ibn Hajar al-Haythami (may Allah have mercy on him) said, discussing the Sufis’ and others quoting this hadeeth as evidence for it to be permissible to dance:
They also quote (to prove their point) that he said to ‘Ali, “You are of me and I am of you,” and he began to hop; and he said to Zayd, “You are our brother and our friend (mawla),” and he began to hop…
Ibn Hajar said:
The response is that all of these are objectionable hadeeths and the wording is fabricated and made up. Even if we assume that they are saheeh, they cannot be regarded as evidence, because what is forbidden is dancing in which there is swaying and twisting, and this is not like that. End quote.
Kaff ar-Ra‘aa‘ ‘an Muharramaat al-Lahw wa’s-Samaa‘, 75.
More than one of the fuqaha’ of the (four) madhhabs (may Allah have mercy on them) regard that as misguidance and innovation if it is done as an act of religious devotion. The one who does that as a leisure activity or for fun is to be criticized and regarded as foolish.
Imam Muwaffaq ad-Deen ibn Qudaamah al-Maqdisi (may Allah have mercy on him) was asked:
What do the fuqaha’ (may Allah bless them) say about one who listens to the duff (hand-drum), flute and singing, and get carried away until he starts to dance? Is that permissible or not? He believes that he loves Allah and that his listening to it, getting carried away and dancing are for the sake of Allah! Please advise us, may Allah reward you and have mercy on you.
The one who does that is mistaken and is lacking in decency. The one who persists in doing those things is one whose testimony is to be rejected according to sharee‘ah, and his opinion is not to be accepted. The implication of that is that his narration of hadeeth from the Messenger of Allah (blessings and peace of Allah be upon him) is not to be accepted, and neither is his testimony with regard to sighting the new moon of Ramadan or anything pertaining to religious matters.
With regard to him believing that it is based on love of Allah, we say that he could show his love for Allah and obedience towards Him in other ways, and he could show devotion to Allah, may He be glorified, and do righteous deeds in other ways. But as for this, it is a sin and playing about. It was condemned by Allah, may He be exalted, and His Messenger, and was disliked (regarded as makrooh) by the scholars, who called it an innovation (bid‘ah) and forbade people to do it. We cannot draw close to Allah, may He be glorified, by doing acts of disobedience to Him, and He cannot be obeyed by doing things that He has forbidden. The one who commits sin as a means of drawing closer to Him will be met with rejection; the one who takes idle pursuits and playing about as acts of religious devotion is like one who spreads mischief in the land. The one who seeks to reach Allah, may He be glorified, via a way other than the way and Sunnah of the Messenger of Allah (blessings and peace of Allah be upon him), is far from reaching his goal
Dhamm ash-Shabbaabah wa’r-Raqs wa’s-Samaa‘ by Ibn Qudaamah, MS (p. 2)
Imam al-‘Izz ibn ‘Abd as-Salaam, the great Shaafa‘i faqeeh and scholar of usool (may Allah have mercy on him) said:
With regard to dancing and clapping, it is frivolity and silliness like that of females; no one does such things except one who is a show-off or a liar. How could anyone regard it as justifiable to dance to the rhythm of the music and become oblivious when the Prophet (blessings and peace of Allah be upon him) said, “The best generations are my generation, then those who come after them, then those who come after them,” and no one among those exemplary generations did such things? It cannot be imagined that one who fears Allah and understands anything of what it means to venerate Him would dance or clap. Clapping and dancing only come from one who is foolish and ignorant; they do not come from anyone who is wise and virtuous.
Qawaa‘id al-Ahkaam fi Masaalih al-Anaam, 2/2349-350, Mu’sasat ar-Rayyaan edn.
The scholars of the Standing Committee were asked about the Islamic ruling on those who remember Allah whilst swaying right and left in a trance, reciting in unison and out loud.
That is not permissible, because it is done in an innovated fashion. The Prophet (blessings and peace of Allah be upon him) said “Whoever introduces into this matter of ours anything that is not part of it will have it rejected.”
Shaykh ‘Abd al-‘Azeez ibn Baaz, Shaykh ‘Abd ar-Razzaaq ‘Afeefi, Shaykh ‘Abdullah ibn Ghadyaan, Shaykh ‘Abdullah ibn Qa‘ood
Fataawa al-Lajnah ad-Daa’imah, 2/529
And Allah knows best.