Yes it does dazzle if shone in the direction of passing cars people, but its tester to be seen than not.
I do a *lot* of cycling. My normal cycling commute is 150miles a week, supplanted by weekend and overnight rides of anything up to 200miles in 24 hours.
I don't actually agree with your above statement. If your lights are dazzling a driver, that driver can no long judge your road position, direction or relative speed. Neither can a cyclist coming the opposite way (which is a particular problem on narrow cycle paths).
Bright light yes, dazzling, no. You can have a flood of light on the road and enough spilling at driver height to be seen. If you are worried about being noticed, add a 1/2watt front light and put it on flash. A flashing light on the road says 'Cyclist' to any driver and gets attention more than 1000 lumens.