I just tried a sample of what the pattern tells you to do. I didn't try to knit the stitches onto a stitch holder, I don't know if that makes any difference, but I didn't do it. Okay, if the yarn is right at the end of the holder it shouldn't matter, that is where it ended up when I knit them and then slipped them.
After you have the stitches on the holder, ignore them and on the next stitches in front of you on the left needle tip cast on the 14 stitches using one of the knitted cast ons. Now knit the 14 stitches you just added. You don't need to "rejoin" your yarn to the stitches on the left needle, you just keep knitting around the row or round. After you have knit the 14 you cast on, then rib over the next 29 just continuing around the round. The place where you put the 26 on a stitch holder will leave a hole for the dog's front leg to go through. Then the 29 are the tummy I think (could be the back) and then you make the other leg hole by repeating the process.
Knit the next 26 and put them on the holder and then on the first stitch coming up on the left needle tip cast on 14 and knit over them and then rib the final 9 stitches. You are still working in the round just as you were and now you have two holes for the front legs. Then on the following rounds just knit around the stitches that are not on the holders, that is where the leg holes are.
My first leghole turned out right but the second one didn't, but I only had one row of "dog sweater" and it was a little weird trying to work on it. I don't know if the ML was any problem, I think it works, my sample was just really small and hard to work on. LOL
I think you later go back and pick up the stitches on the holders and maybe make little short legs.
Does that make any sense? I hope so.