If the CPU on the host computer is too fast, then Daggerfall will run buggy with the max setting. Just like how Daggerfall will run buggy if it's natively on a too fast CPU. The town NPCs will jitterbug, and the climbing won't work and so on.
Besides, the dynamic core and max cycles are default for protected mode software, which Daggerfall is.
I've heard that rumor also, but it runs nice and smooth on my old P3/633 and P3/800 using 98SE. Never had that problem of NPCs warping, except on slower machines where things choked out on the CPU. And I have NEVER seen or heard of DOSBox changing a user's settings to dynamic/max just because a game is in protected mode, and I am fairly sure you're wrong here. I have used the setup of 15k cycles on a normal core for Doom/UDoom and it has NEVER switched to max/dynamic on me.
The + and - are not his problem if he is using a cycles setting that is too low, as the emulated CPU is his bottleneck. If you use the rigth DOSBox setup to begin with, you won't have to adjust that option and it'll run great after a clean install.