I can confirm that Plex will get title tags from streams in MKV files, but it isn’t super-duper common to find titles on streams (vs. the container) in MKV files.
What exact steps are you taking for the Plex Dance? There are some instructions out there with things in the wrong order - and it won’t work if things are done in the wrong order.
The canonical order:
Which movie agent are you using? The new Plex Movie agent? I haven’t needed to Plex Dance anything with it. A scan/refresh has consistently been enough.
Edit - I see in your shared .xml that it’s not the new agent.