Firebase App Indexing:
Firebase App Indexing gets your app into Google Search. If users have
  your app installed, they can launch your app and go directly to the
  content they're searching for.
To get your app's content indexed by Google, use the same URLs in your
  app that you use on your website and verify that you own both your app
  and your website. Google Search crawls the links on your website and
  serves them in Search results.
Firebase Dynamic Links:
Firebase Dynamic Links are links that work the way you want, on
  multiple platforms, and whether or not your app is already installed.
With Dynamic Links, your users get the best available experience for
  the platform they open your link on. If a user opens a Dynamic Link on
  iOS or Android, they can be taken directly to the linked content in
  your native app. If a user opens the same Dynamic Link in a desktop
  browser, they can be taken to the equivalent content on your website.
Firebase Dynamic Links Use Cases:
The following use cases are some of the ways you can use Dynamic Links in your app to drive growth and engagement.
- Converting web users to app users
- Social, email, and SMS campaigns
- User-to-user sharing
- Converting desktop users to app users
- Real-world app promotion
Checkout more detail at Firebase Dynamic Links Use Cases 
I hope, it clear your confusion between firebase app indexing and dynamic links.