'Dynamic envelope' refers to the typical space someone takes up while cycling. It will be larger than the static width because people will 'wobble' while travelling along.
The DfT's LTN 2/08, Cycling Infrastructure Design, suggests that above 7mph the 'dynamic envelope' of someone cycling will be 0.2m wider than their static width. Below 7mph, it will be even larger - at 3mph, deviation from a straight line may be as much as 0.8m.