That’s normal behavior, the alt text can only be edited if the image is a static image.
When the dynamic option is enabled, it pulls the alt text from the image itself, you can not edit the alt text.
Think about this scenario, you are adding the image block to a content template as featured image, if it allows you to edit the alt text, then all the featured images will have the same alt text.
An option/feature for this would really improve how you can make SEO work!
Think about this scenario, you are adding the image block to a content template as featured image, if it allows you to edit the alt text, then all the featured images will have the same alt text.
Wrong – you can use filters/shortcodes for creating a dynamic alt-text!