It's not exactly dynamic, but I did solve this problem by creating four different m3u8 playlists. I labeled each playlist to represent a stream quality (low, medium, high, extreme). The user would select one based on the desired max quality. The extreme playlist includes the URLs of all qualities. The high playlist has less URLs than the extreme, the medium less URLs than the high, and the low less URLs than the medium. Whenever the user selects a different quality, I would just switch the base stream playlist to the respective quality playlist URL.
Here is a simple example of the four different playlists.
HLS_Movie_Extreme.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=64000
stream-0-64000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=350000
stream-1-350000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=800000
stream-2-800000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=1200000
stream-3-1200000/index prog_index.m3u8 m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=1800000
stream-4-1800000/prog_index.m3u8
HLS_Movie_High.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=64000
stream-0-64000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=350000
stream-1-350000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=800000
stream-2-800000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=1200000
stream-3-1200000/index prog_index.m3u8 m3u8
HLS_Movie_Medium.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=64000
stream-0-64000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=350000
stream-1-350000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=800000
stream-2-800000/prog_index.m3u8
HLS_Movie_Low.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=64000
stream-0-64000/prog_index.m3u8
#EXT-X-STREAM-INF:PROGRAM-ID=1,BANDWIDTH=350000
stream-1-350000/prog_index.m3u8
Like I said, it's not dynamic, but you could use various techniques to get the users network connection and point to the desired quality playlist if needed. For me, it was sufficient to get the user's preference, and adjust the stream accordingly.