Imagine you have a piece of play-doh. When you squish it, it changes shape and when you let go, it goes back to its original shape. Soft body dynamics is like making a computer program that can do the same thing with a 3D object.
The computer program can make the object move and squish as if it were made of something soft like play-doh or a rubber ball. This is useful in making things like animations for movies or video games because it helps make things look more realistic.
To do this, the computer program uses a bunch of little virtual "points" (called particles) that make up the object. These points can move around and squish together in different ways depending on how the object is supposed to move.
Soft body dynamics can also take into account things like gravity or other forces that affect how the object moves or deforms. It's like having a computer program that can make a virtual play-doh ball bounce or squish in the same way a real ball would.