Based on the support ticket 77299, it appears Sauce Labs Dashboard does not support displaying of "Skipped" statuses on tests that have been skipped even though in the CLI, tests are displayed correctly, i.e. Pass, Fail, Skipped.
SauceLabs Dashboard however displays skipped tests as being "Failed". This causes confusion when looking at the dashboard as to the true status of the test. There is no benefit of using the dashboard then and instead our team members should just rely on the console/terminal output.