Why was Angel Dust's breast not shown during her fight?

Probably because Gina Carano asked them to. I couldn't find any statements from her one way or the other (I doubt anyone is brave enough to ask her to her face), but it's probably the same reason that any other actress does or doesn't get naked in a movie.

Actresses in movies that have to do sex scenes agree to do so upfront, and typically require compensation for them. It's up to each individual actress how much or little skin she is comfortable showing, and they often have specific requests (clear/closed set, etc) in order to agree to do it.

For someone like Morena Baccarin, who played Vanessa, her nude scene was a significant part of the story (it basically shows the Wade/Vanessa relationship in condensed form), and there was probably a specific day of shooting and special set designated for that scene. Additionally, Baccarin has been nude before (in Homeland), and as a dramatic actress that's probably a topic that comes up a lot, and which she has already thought about and decided what her limits are.

Gina Carano is, professionally, an MMA fighter who is just now trying to break into acting, but is primarily expected/intended to be an action star. As far as I know, she has never agreed to do any nudity on film, and I doubt it would be worth it for either herself or the producers to write a nude scene into this one. The scene didn't need nudity to have the comedic impact they were going for, and she didn't need to do one for no meaningful purpose. Unfortunately, a lot of young actresses will do them for no meaningful reason, because it gets them work -- Carano was getting this part anyway. The gag of having Colossus shield not only his own eyes, but the viewers eyes, from the exposed skin worked perfectly well to get the point across.

Actresses not being comfortable with nude scenes is one way to see it.

But, in the scene, one has to notice that Colossus shies away when Angel's breast was exposed.

Colossus has a dad-like mentality of viewing things, and is more towards the conservative side of things.

Colossus covers his face when the breast was exposed. And the director did a great job to show that emotion by putting Colossus's hand in between the camera and Angel.

Seems like it would have been unnecessarily gratuitous. Despite the hardcore language and violence, I think Deadpool still wants to maintain a certain level of dignity. The joke was funny as is and didn't need the actual boob to be any funnier. Besides, even if an actress is uncomfortable with actual nudity, there are tons of alternatives available. Everything from body doubles to prosthetic body parts. If they really wanted a boob to show there, they could have made it so.