Chain Combo!
You know what would be interesting to do with the chain? Making into a quick, combo move like Marth's side-B move. Instead of holding it out and using the stick to move it around, pressing it once creates a quick lash with longer range than it used to have, causing the enemy to flinch but only giving a little bit of damage. It could be used repeatedly, like before, and Sheik will stay in the same place.
That way, an enemy with more priority and strength is about to rip you a new one with a smash attack, you just whip out the Chain for a quick, cancelling strike instead of dodging or using your own smash (which would likely get out-prioritized).
Buff the lag on start-up and recovery to make it less punishable, too.
And, of course, tether recovery.