The woman disappears after the dance, after she spots whoever it was she was looking for (we don’t get to see). Squall goes to brood on a balcony. At this point, Quisis shows up… in her casual clothes? She… she has a uniform, devs, we’ve seen it. And her casual clothes are sure as hell no dancing gettup. She looks like she’s raided Indiana Jones’ lost wardrobe.
Quistis tries to chat with Squall, only for Squall to point out what I was thinking at the time: she’s his teacher and god this is really awkward. I think we’re supposed to have seen this scene as more evidence of Squall’s standoffishness, because she laughs and it certainly continues in that direction, but… no, honestly it was just creepy on Quistis’ part! You’re his teacher.