Question

why does Sherlock holmes remark that the use of phosphorus on the Hound muzzle was a cunning plan​

Answer 1

Luckily, Holmes is able to shoot and kill the hound before it gets the chance to hurt anyone or literally scare Sir Henry to death. Upon inspection of the the animal's body, they can see that the hound seemed to be on fire because someone covered it in a "cunning preparation" of phosphorus, an element that glows when it is exposed to oxygen. And so, this hound is not an immortal, devilish beast, but an uncommonly large dog that Stapleton, the true villain, made to look impossibly, supernaturally terrifying in order to use the legend to his advantage.