In fact, dynamic evaluation is so old and obvious that the first paper to demonstrate RNNs really worked better than n-grams as LLMs did dynamic evaluation: https://gwern.net/doc/ai/nn/rnn/2010-mikolov.pdf#page=2
Dynamic evaluation offers large performance boosts in Transformers just as well as RNNs.
The fact that it's not standard these days has more to do with cloud providers strongly preferring models to not change weights to simplify deployment and enable greater batching, and preferring to crudely approximate it with ever greater context windows. (Also probably the fact that no one but oldtimers knows it is a thing.)
I think it might come back for local LLMs, where there is only one set of model weights running persistently, users want personalization and the best possible performance, and where ultra-large context windows are unacceptably memory-hungry & high-latency.