logically (my logic) the Dynamic SDCCH is a feature at BSC level.
It is necessary for the BSC to support this feature because it is the one that allocate channels. He knows the configuration at any moment of its cells and decide whether channel is SDCCH or TCH depending on load. HE MUST SUPPORT this feature to do it.
At BTS level it is just for configuration purpose.It allows BSC to only know if it is possible to use channel in SDCCH or TCH mode.