I first came upon the idea of a dance duel in a conversation with Dr. Emily Winerock (Dance Historian, Guest of Honor, Known World Dance and Music Symposium XIII). On her advice, I found a book "The Art of Dancing in Seventeenth-Century Spain: Juan De Esquivel Navarro and His World"A.
There were some references by Juan De Esquivel Navarro to the custom of Retos, or dance duels. They were described in this slightly post-period manual (1642) thusly:
“...by channeling grievances through the procedure of the reto (challenge). Calling to mind the careful code of honor cultivated by the Spanish gentleman, and adopting the language used by swordsmen of the age, Esquivel devotes considerable discussion to the practice of retos, which were typically sparked by insults about a dancer, or even more frequently, about the dancer's master. Retos were actually danced duels, performed within the context of a prescribed ritual and formula, with the dancer's technique serving as his weapon [ff. 40v-44v]. These events themselves were highly staged encounters. They required a formal publication of the challenge, including setting a time and place for the face-off at which one dancer was set against another in an established sequence of choreography drawn from the dancing school syllabus. A ritual of accepting the challenge was also prescribed. And, as in any duel, each contestant must have his respective seconds."...B
After reading about this custom I realized I had a friend, Gun∂ormr Dengir, who was about to receive a Laurel and who would love this kind of zaniness. I then discussed the idea with Mistress Þóra Eiriksdottir and Master Justin du Coeur, both of whom agreed it would be a welcome addition to the vigil.
Sadly for us, the translator of the source reports not finding any other references to this custom and concludes it was not widespread, or may even be an invention of Navarro.