The Dynamic bitrate feature is useful in the scenario where you have limited network bandwidth. In network congestion scenarios, having a static bitrate can cause frame drops because the network connection is unable to keep up and will drop frames to improve the stability of your stream. This feature allows you to adjust the encoder bitrate at run time.
Dynamic bitrate is useful for Video on Demand and Video Conferencing use cases.
For more information, see Dynamic Bitrate in H.264/H.265 Video Codec Unit LogiCORE IP Product Guide (PG252).