Moodle supports this, which will help with testing. I have not seen support in any other LMS I've tried yet (Canvas/Blackboard/Schoolbox).

Just learned it's supported in Brightspace as well.

I'd argue it's almost essential given how much more complicated the LTI 1.3 setup is than 1.1. Although Blackboard has taken an interesting approach with their centralised registration.

I implemented dynamic registration successfully with the help of this very useful resource: https://moodlelti.theedtech.dev/dynreg/

Here's my implementation. I hope it may help somehow for people trying to implement this right now. I have only tested it with Moodle though.