The Dynamax capability in Pokémon Sword and Shield has been banned by the Smogun competitive community. Read on below to learn more about this decision:
The OU council recognizes that Smogon is a large institution within the realm of competitive Pokemon battling. Additionally, we understand that banning a core mechanic such as Dynamaxing will have a substantial impact on the competitive landscape of this generation throughout our metagames and perhaps other formats. Given this, we would like to use this thread to explain the ban of Dynamax as well as provide any relevant information for the sake of clarity and transparency.
While Dynamax will be banned from the SS OU metagame and tiers below it such as UU, we do not require individuals to follow our set of rules and restrictions in their own casual battles and non-Smogon affiliated tournaments. We recognize that we are not an official Nintendo format. Our tiering infrastructure is only in place for Smogon metagames; our ultimate goal from a tiering perspective is to create a competitively balanced metagame that prioritizes player skill as a determinant of who ultimately wins each battle. Removing Dynamax from our metagames helps us accomplish this goal, but that does not mean that you must adhere to this ban or our set of rules and restrictions in general if you are not playing official Smogon formats through Smogon tournaments or the official ladders on PS. There are still other formats in which using the Dynamax mechanic is usable. For example, both Ubers and National Dex OU currently allow for Dynamax to be used, or if you wish to play a less restricted game, then you can play alongside your friends using the Custom Game format.
Source: Smogun.com