Most kobolds will say the dog state is their species' true form since it's the shape they take when left to themselves. In dog form kobolds have a distinct sense of self and canine traits like acute senses, fur, and endurance that let them thrive in a variety of ecosystems as resourceful semi-omnivorous persistence predators similar to humans. They use those strengths and their mobility to maintain a widespread but close-knit society of band, family, and clan groups organized around a network of partially subterranean hub cities. It's an efficient arrangement that can last indefinitely unless it's disrupted by exposure to a specific environmental factor, namely dragons.
The presence of a dragon in the area triggers an epigenetic shift in all kobolds within range, causing the exposed individuals to begin metamorphosing into lizard form. The change is agonizing and lasts several weeks as the kobold's body gradually reconfigures itself, completely consuming and rebuilding the skeleto-muscular and neurological systems. In lizard form kobolds lose a large portion of their individuality, falling into a set of closely unified thought patterns almost like a hive mind that's focused on the dragon. They become much more sedentary, living as purely carnivorous ambush predators in age-separated but otherwise egalitarian groups that keep as close to the dragon as possible without being eaten. If an individual kobold strays far enough from the colony they'll begin to revert to dog form, but it's so difficult to leave once the change is complete that it rarely happens.
With its effects and implications the change is obviously a subject of controversy and dread in kobold communities. Though some clans view dragons as holy creatures and consider their influence a blessing, most abhor the loss of self and agency that lizard form inflicts. Rumors of a dragon approaching or settling in an area will spark mass migrations out of the region to escape its influence and sometimes, in the case of wealthy cities, extremely lucrative contracts to slay the beast before it can nest.
