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I started a few ML's with Everton on both settings to see if there was any difference between player development.
If I chose normal the gauge shown at the players growth statistics just showd either a small increase, or decrease of stats. There weren't any significant differences between say pienaar (28 yo) and rodwell (18 yo). It seemed that when the players reached a certain age (28-29) they'd stop growing, and start decreasing. Maybe this "Normal" gives all players in game the same development curve where they grow slowly till they are around the 27 and stop growing. I cound't notice any difference in development when played a good/bad match.
If I chose dynamic the exact same players are decreasing and increasing. It just seemed to happen faster. Also some players had there whole gauge filled up meaning they'd grow very fast in some weeks (like Fellaini) and others had the same growth pattern as in the normal setting. The strange thing is though. Saha, who is now 32 years of age, seemed to be having increasing stats. So maybe in the dynamic mode every player keeps his real development curve.
I tried to figure this thing out but I really have no idee if my therie comes anywhere near the correct answer. Maybe anyone else kniws the exact difference?