Toon in the videogames it does, but the Data Audit's description of Shield Dust is different. Instead of negating secondary effects it reduces Effect Chance to 0%.
Fake Out does not have an Effect Chance in BBP (according to the Data Audit), and also has no indication that its flinching is tied to an Effect Chance. Therefore, I'm ruling that Shield Dust does not interact with
Fake Out. Ask to get Shield Dust's description revised -- or
Fake Out's effect chance changed to 100% -- if you want.