Standoff is a vital tool in your arsenal in Ghost of Tsushima, and is an aspect of Jin’s honorable training as a Samurai. When you are first facing a group of enemies, you can choose to enter a Standoff with them, standing still and daring them to come close to you.
When you are approaching a group of enemies, you will see a prompt on the screen telling you that a Standoff is available, and you can hit the up button on your D-Pad to take advantage of it. Jin will enter a careful stance, waiting for his enemies to approach. When they get near, you can hold the Triangle button, and wait for when of them to strike.
When they do, release the Triangle button and you will slice through them before their blade can hit you, unless you are too late in which case you will take damage. You will instantly kill the enemy who tries to strike you, if you are successfully, reducing their advantage and giving yourself an easier fight.
Combat in Ghost of Tsushima is pretty brutal, and you will be felled in just a couple of strikes, so reducing enemy numbers in this way can be a huge advantage. Better yet, as you level up and get access to new Techniques, you will be able to take out even more enemies during a standoff. This will allow you to clear out entire groups of enemies quickly, but your timing will need to be perfect to continue the chain of strikes.
One important thing to keep in mind about Standoff is that you cannot do it against singular enemies, and even groups of enemies will rapidly close the distance on you, so your window to enter a Standoff will be limited.