The light shone down from above, filtered through the trees until only a trickle of light made its way down to the forest floor.
Hey, this is a nice description!
I would make this its own separate line to add weight, though.
Bugs of all sizes chirped and played and interacted.
I would make this a separate line too.
In general, learning how and when to use spacing can help quite a bit. Different actions or ideas can easily justify using a paragraph break or at least one space between lines. Some authors even prefer to you 2 lines in between paragraphs!
The first line was only a description of the setting. The second line introduces the bugs that are playing and interacting. If the second line was describing more of the setting without introducing the bugs, I would not recommend separating the two lines because describing the setting is all part of one basic overall idea aka paragraph.
Most people seem to only tolerate paragraphs about half this length. (I don't mind long paragraphs myself, but I think almost everyone else would recommend shortening them.)
From the description here, we can see this forest is a positive and peaceful place.
The human standing there, however, seemed far more out of place, especially given the urban clothes and simple Pokemon-themed bag they had been clutching with their life.
So this person seems to be out of place and scared. I wonder how they got here?
I would recommend this line spaced separately from the line before it since it introduces another distinct character.
Occasionally, they snapped their eyes to the novelty poketch on their wrist, watching the pendulum swing until they could leave this death trap.
So they are here for some amount of time, but I wonder what they are scared of. Is it the bugs? Are they scared of bugs?
This line could probably be ok joining the previous sentence above without spacing since its still talking about the actions of the human.
This forest was one of legends, one that claimed hundreds of the most talented trainers, and this kid lost to a Caterpie, landing them in this mess.
What is a trainer so new doing in a place so reportedly deadly?
Caterpie doesn't sound like a 'legendary threat' to me though.
And what is the mess, I wonder?
I also wonder what region this is in. Could this be Viridian forest? There are other places it could be too.
After an agonizing 5 minutes passed, they finally let go of the breath they were holding for nearly half an hour.
Small numbers are better to be spelled out. So use 'five' instead of '5' and it will flow better with the narration and avoid looking jarring.
Again, not sure what it was they were so afraid of. I suppose they ran from a Caterpie that beat them in a battle and maybe they were hiding from it?
I wonder how they lost to it? What Pokemon were they using against it? Were they trying to beat the caterpie by throwing rocks at it or something? Some more detail here could help to enrich the story.
The dare was over, and they could go back to the playground.
Oh, kids over-exaggerate threats. This simple forest became a 'legendary forest of death and doom!'
I guess the dare was to stay in the forest for a certain length of time.
Oh THAT is not a good situation for a kid! Yikes!
A wave of panic filled them, and they sprinted in a random direction, hoping to find their way out, and they found their way... to trip on a passing bug and straight into a mud pile.
I hope this isn't going to be a fic where the kid gets eaten alive by weedles or something. If so, you REALLY need to put up a content warning or something...
Despite the laughing and teasing about being a Clodsire by the other kids, they felt relieved to have made it out with their life.
Wait what? So they went the correct direction?
Just because they found their way out of the forest doesn't mean it went to the correct place. It could have been a clearing in the wrong direction. I would try to clarify that better on the previous line.
This makes the mud
far less distressing since they found their way out. It makes sense that they are ok with the laughing and mud since they got back safely.
Still no idea who this human is. Is it a boy or a girl? What's their name? We don't know. Might be good details to include.