Why don't we see huge clouds of dust in the low gravity?

Because dust clouds depend on air. If an atmosphere is dense enough, it can hold small particles suspended against gravity for a short time. Particles suspended in the air like that are called aerosols. Smoke and dust are both solid aersols. Smoke can be carried for a long distance in earth's atmosphere. Dust particles are heavier than smoke particles and so they settle out faster. Both show us the movement of the air that's carrying them, we see billows and curls in the clouds of smoke and dust.

None of that would happen on the moon because there's nothing to keep the dust particles suspended. Galileo showed us that gravity accelerates all objects the same regardless of any difference in mass. On earth the air prevents some objects from falling as fast as others, especially very, very small objects like dust particles. But on the moon only gravity affects them, so dust will fall immediately to the lunar surface.

The behavior of the dust in the video and film taken on the lunar surface is one of the most compelling reasons we have for believing it was shot in a vacuum. The dust is clearly dry, but it falls immediately to the surface and does not form clouds.

A Grumman engineer who worked on the lunar module says that it was absolutely necessary to be able to see the surface to land the LM. With swirls of dust blown by the descent engine there would be no way to see the ground during the latter phase of the critical landing procedure. [David Percy]

Percy fails to name his informant, so we have know way of knowing whether this witness really is who he claims to be and has the authoritative knowledge relevant to his question. We find that many of Percy's sources are anonymous, relieving his critics of the possibility of verifying their claims.

However, no less an authority than Tom Kelly, Grumman's chief design and manufacturing engineer on the lunar module, has a very different opinion:

"He [Apollo 12 commander Pete Conrad] performed the final one hundred feet of descent primarily on instruments, since his view of the surface was largely obscured by dust kicked up by the descent engine's exhaust." [Kelly01, p. 223]

Dave Scott also reports that his Apollo 15 lunar module made an IFR landing. This was a routine manuever practiced in simulation. [Chaikin94] In fact, the astronauts seemed to believe an instrument landing was more probable than a visual landing.

Again we find that David Percy consistently places himself at the mercy of "experts" who tend not to know as much as expected.

NASA's estimates of dust turned out to be quite conservative. None of the lunar missions encountered as much dust as was expected. And so it seems incongruous that an agency so obsessed with dealing with dust would require precise surface visibility in order to effect the landing. It makes more sense to suppose that NASA would hedge its bet and require the lunar module to be able to deal with a dusty landing. And so they did. David Percy is simply wrong.

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The landing radar (left) is used to to determine altitude and rate of descent. Normal aircraft altimeters use differences in air pressure to measure altitude, but obviously that won't work in a vacuum. So the only way to measure the distance and descent rate is by radar, which was accurate to about 15 feet (5 meters). But the descent rate was already fixed before switching to instruments, so it was just a matter of riding it down until the contact light illuminated.

The "eight ball" instrument, familiar to pilots as a gyroscopic horizon reference, provides the pilot with tilt information. Since it is necessary to set the lunar module down as vertically as possible the pilot's attention is usually fixed on this instrument during the final descent. The lunar module pilot is responsible for reporting the radar data.

The pilot must still select his landing site visually. There is no instrument which informs the pilot of obstacles like craters and boulders or slopes which may exceed the lander's tolerance. But this selection takes place at a much higher altitude where dust is not a factor. One cannot land the lunar module from orbit on instruments alone. This may be what Percy's engineer refers to. But it is absolutely false to argue that displaced dust would have prohibitively impaired the pilot's ability to complete the landing.

Grumman's reference manual for the lunar module describes the landing process:

"At approximately 200 feet above the lunar surface the LM pitches to orient its X-axis perpendicular to the surface; all velocity vectors are near zero. Final visual selection of the landing site is followed by touchdown under automatic or manual control. [ANR-LM, p. GN-13, emphasis added]

Why would the descent engine produce clouds of dust at all? Above you argue that dust clouds require a sufficiently dense atmosphere.

The descent engine's exhaust products are gases. Although they will eventually disperse into the vacuum, they are momentarily dense enough to hold some dust particles suspended. The gases impact the lunar surface and displace some dust with them. Even when the gas disperses to the point where it can no longer suspend the dust, the particles will follow ballistic trajectories dictated by the initial impulse from the exhaust gas. You can see in the film how the dust immediately settles as soon as the engine is turned off.