I would expect both Bitcoin and USD to be used.. and I would expect dollars to be used way more, until people start getting used to bitcoin.. lower usage as compared to the dollar's usage does not even come close to justifying assertions that bitcoin is on the road to failure.

And, sure if there are dollar options available and there are not any costs to transact in dollars, then likely the vast majority of times it would be better to spend dollars first.  We also may well know that dollars are overall a less sound (softer) currency, but it does not mean that individuals are going to appreciate idea about which money/asset is more sound merely because the govt says that bitcoin is good....

I would speculate that when the BTC price is going down, there are reasonable impressions that it would be better to hold dollars rather than to hold an asset (bitcoin) that is going down in value.. which surely is correct in the short run but not necessarily correct in the longer duration.. and the more that any of us zoom out the more that we should be able to appreciate historical BTC performance that does not guarantee future results, but should give some ideas as people learn more about the underlying reasons why bitcoin is the soundest of moneys..

The idea of sound money may well not sink in as something that should be considered for people who might not be clear about making evaluations and in terms of how to hold BTC and how much BTC to spend spend and replace or some other ways that might make more sense in terms of personal circumstances regarding how to attempt to manage bitcoin's likely ongoing and likely inevitable volatility that can also be seen in its historical volatility, too.