As written in the documentation https://world.episerver.com/documentation/developer-guides/CMS/dynamic-content/ Dynamic Content is depricated so I don't think any fixes or changes will be made.
I would suggest that you migrate your Dynamic Content into Blocks which can also be added to XhtmlStrings.
I wrote a post about migrating Dynamic Content to blocks which may help:
Thanks so much David!
That will help migrating the content
We have updated the documentation based on your blog post https://world.episerver.com/documentation/developer-guides/CMS/dynamic-content/migrating-dynamic-content-to-blocks/
Additionally we set up a working solution on our github https://github.com/episerver/alloy-mvc-template/tree/doc/migrating-dynamic-content
Just clone and run - it's slightly improved, you don't need to create that embeddedBlock div yourself but you can use CreateContentFragment from the ContentFragmentFactory.
Since CMS 11 Dynamic Content is a separate NUGET package. My customers use it frequently, however by using it, it's impossible to update to latest TINYMCE version (version 2 and up). Will this problem be fixed any time soon?