See What does the dynamic.classpath flag do? (IntelliJ project settings).
Not sure what you want to fix. If you need to avoid dynamic classpath, revise your dependencies, move libraries, project files and JDK to a directory with short path.
Edit: the bug you linked in comments makes sense, however what happens is that the command line when running your tests exceeds the OS limit even when using dynamic classpath. This can happen because of lots of command line arguments or options which cannot be shortened by IDEA, as IDEA can only workaround long classpath issue. There is nothing we can do about it, you should revise the way you pass parameters to your app so that the command line length is within limits.
From the IDEA side, we'll improve the handling of such case. This dialog will no longer be displayed when dynamic classpath is already used and you will get another error message about the long command line. I've submitted a new issue for this case.