La ilaha illa Allah is the shorter, unilateral half of the full shahada, and its Quranic occurrences, including at 37:35, present it as a statement the Prophet's opponents specifically refused to accept, framing the phrase from its earliest attestation as a dividing line rather than as a neutral description. Hadith literature outside the Quran itself attaches considerable weight to its repetition, with several reports promising particular merit to reciting it a fixed large number of times in a sitting, and it is this hadith based emphasis on counted repetition, rather than anything in the Quranic text itself, that supplies the warrant for treating the phrase as a formula for sustained dhikr rather than only as a single declarative utterance made once.
It is in Sufi practice that this counted repetition becomes most elaborate and most visibly ritualized: many tariqas structure group dhikr sessions around loud, rhythmic repetition of la ilaha illa Allah, sometimes coordinated with breath and with physical movement, a use considerably more theatrical than the phrase's place in ordinary daily worship among Muslims generally, for whom it functions simply as the negation clause of the creed. This divergence between quiet, individual, occasional use and loud, communal, rhythmically intensified Sufi dhikr has itself been a point of friction within Islamic scholarship historically, with critics of certain Sufi practices arguing that the manner of recitation departs from how the earliest generations are recorded to have said it, while defenders point to the same hadith material on repetition as their warrant for intensifying it.