You need to assign the dynamic material to your mesh first. Try setting the material on the mesh with the dynamic material you created. Right now you just have a material instance sitting in memory.
Everything you see in the content browser is an archetype or a template/default if you will. Pretty much everything you do at runtime SHOULD only modify temporary instances of that archetype and thus their changes should not be reflected in the content browser or any other copy unless you specifically tell it to do so.