Why have I been told not to say "ou dous" when someone does something nice? Does it not mean "You're sweet?"

Yes that is the literally translation, but it refers to sex. 
People use it to express that something feels good.  It is most commonly  used, for example, during a massage, petting, or the  sexual act.
Pa egzanp:
This feels so good.
It feels so good
Li dous.
Or
You feel so good
Ou dous.

If you want to say "You're sweet." when someone does something nice, then you'll say: "Ou janti." or "Ou trè janti."

Haitian Creole ↔ English Reference, Look up Haitian Creole and English Words