Part of this is to look more intimidating. By stomping the ground and kicking up dust they make themselves look big and scary. They are hoping the other fighter backs down without having to fight. An animal do not want to fight if they can avoid it as it takes a lot of energy and they will get hurt. So getting an opponent to back down without a fight is a huge win.
The other thing they do is to dig away the lose dirt to get to harder more compact dirt underneath. This gives you more traction so that you can accelerate faster and have a lower chance of slipping. This means that if there is a fight they have a greater chance of winning.
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