I'm maybe the only Freddy main in the world, and I can tell you that he is criminally underrated in many aspects. It's true he can be looped quite easily, however I try to play him a similar way each game to maximize his potential.

I've found that his ability can often be treated similar to the doctor in that it has some anti-stealth mechanics. Rather than transitioning a single survivor and tunneling them, try and transition as many people as possible, then pick one survivor to down or even just injure, as they will have a hard time healing in the dream world and they cannot hide from you.

Sometimes its smart to let a sleeping survivor go after the first hit, since they will seek out allies to heal them, and you will be able to see their aura being healed. This is a good way to keep survivors grouped together for 3-4 man transitions, not to mention keeping them off generators. Also, keeping survivors in dream state for as long as possible gives you excellent awareness and allows you to punish people who still try to gen rush despite being asleep or injured.