Daze/Stun?
It’s a really short daze indeed. Adapt your rotation(s) and/or use a stun break (I wouldn’t recommend using a stun break if you can afford taking a small blow).
You can also of course Block/Evade/Immune it, depending on your class. It’s like a Purple/Pink-ish laser is being shot at you, so between seeing that and the travelling distance that the projectile has to go, it’s quite easy to do that.
You could optionally also quickly stow your weapon to cancel your current cast, this prevents some of the negative effect(s).
Just do what you would do with every other Daze/Stun.
We don’t usually use pistol 4 daze to set up anything as it’s too short. It’s usually used to interrupt things like heals, high damage attacks with obvious tells etc. If we spam it we’ll run out of initiative fast and not be able to do much damage. If you get hit by basilisk venom, you may want to stun break that.
The shadow step daze is most likely steal+basilisk venom. Yes, it is hard to avoid. But after you play more against thief, you can somewhat guess when they are using it. It is mind game.
If you successfully dodge that steal, you put the thief in a very bad spot. It is worth gambling.