The Dynamic Shot Controller is a feature that can be found on all Camera Shot clips and allows you to create dynamically animated shots based on a set of settings and without keyframing the camera shot. Within the Dynamic Shot Controller section of the camera shot clip, you can specify one constraint for the position of the shot and another constraint for the rotation of the shot. As the help text suggests, if you do, the related parameter (position and/or rotation) of the shot will be disabled since it will be overridden by the constraint chosen.
The options for Position Constraint are either Offset Tracking, or Rail Tracking.
The option for Rotation Constraint is currently only Frame Composition.
Offset tracking constraints the position of the camera to always be at an offset from a target gameobject’s position.
Rail tracking basically puts the camera on a rail defined by two points and moves the camera on that rail to the closest position possible from the target with optional offset.
Here is an example for a better understanding of how Rail Tracking works. Notice that in this example there is an offset set from the target. Thus the camera here is tracking that offsetted point which is in front of the character (the black dot).
Frame composition affects the rotation of the camera so that it is looking at a target but at the same time tries to constraint the camera rotation so that the target stays within a specific frame within the shot.
As explained earlier, position constraints only disable keyframing the position of the shot, while rotation constraints only disable keyframing the rotation of the shot. As such, you can for example have the Frame Composition constrain for the rotation of the shot, but keyframe the position of the shot manually to move it around.
Similarly, you can combine the Frame Composition constraint with the Rail Tracking constraint. In the previous Rail Tracking example above, as you can see the camera does not rotate as the character is moving beyond the rail on the right since the Rail Tracking only affects the position of the shot. Combining this with the Frame Composition constraint we can have something like this for example.