You rarely use it. Even I have been unable to get a NeoShadow to let me use its Reaction against it noticably. It's not really that high into the air that the NeoShadow jumps, just more like the distance a normal Shadow jumps. The easiest way to get it is to go to a NeoShadow infested area (Memory Skyscraper) and mash the Triangle button.

The Reaction is called Wild Dance, and doesn't really do alot of damage. There's no real way to induce most enemies to attack with a Reaction pre-requisite, rather than just waiting out the fight and hoping it attacks.