They’ve taken a new approach to this. It’s still “dynamic” and it still “takes into account multiple devices”, but the interface is different — and, I think, clearer.
There is now a View As button at the lower left. Click it, and you’ll see every possible size and orientation your interface can assume. Click an interface size-and-orientation to see what your interface looks like with it.
As to “why”, you might want to watch the WWDC 2016 video on this topic. I think they justify this change pretty well.
solved Xcode 8.1 beta storyboard not dynamic