A dynamic flow is a dynamic component that you insert anywhere in a flow. It can be either complex (for example, error handling flow) or simple (for example, a popup page). It is usually triggered when there is an unexpected exception or a system error. Most host actions should be wrapped with some error handling logic.
A dynamic flow can extract and describe common and repeated parts of flow definition as flow components. It enables you to focus on logic of the flow, such as “money transfer”, without having to worry about “error handling”. You do not have to define these flow components in the Transaction editor.