"Barking dogs seldom bites". In the sentence "Barking dogs" is whether a participle or gerund?

In 'barking', the -ing form is used as an adjective and it modifies the noun dogs. Due to its use as an adjective, the adjective 'barking' is a participle.
However, when the -ing form is used as a noun, then the word formed is a gerund. For example, Smoking is injurious to health.

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