DynamicModule is intended to be a lexically scoping construct, meaning that DynamicModule variables will only scope any instances of those variables that appear literally in the body of the DynamicModule. This is similar to how Module works. For example, in the input:

the symbol x is scoped by the DynamicModule and the instance of it in the body is localized and maintains a value that is tracked in the resulting user interface construct. The symbol y is unscoped and refers to the kernel's current value for y, which may be set at any time, independent of the user interface construct.

The lexical scoping of DynamicModule has never been strictly enforced, and it is possible for DynamicModule to scope references that are not lexical, meaning that they do not literally appear in the body of DynamicModule.

In the above example, the x in Dynamic[x1] is strictly lexically scoped by DynamicModule, but the x1 in the definition of f1[] is not. Nonetheless, the slider generated by f1[] is clearly changing the value of the DynamicModule variable x1 rather than a global kernel instance of x1.

This pattern of usage works in the Wolfram Language, but it is considered an anti-pattern and should be avoided.

Fixing scoping problems with DynamicModule variables involves rewriting the code in such a way that all instances of the variable appear literally in the body of the DynamicModule variable. In the previous example, the problem could be fixed by passing Dynamic[x] as an argument to f[].

It is important to pass Dynamic[x2] rather than simply x2 in this case, as the value of x2 must remain unevaluated until it is fully represented in the expression Slider[Dynamic[x2]].

If you need access to the variable directly rather than the full Dynamic expression, it may be better to define your function to take a variable wrapped in Dynamic. In the following example, f3 defines a slider that reverses the input. The function pattern of f3 includes the Dynamic so that the variable can be isolated and used in the definition.

The system option "DynamicModuleScopingEnabled" can be used to enforce strict lexical scoping.

Changing the setting to True and reevaluating the code that generates your user interface constructs allows you to test whether your code makes use of improper scoping. Rerunning the original example demonstrates a slider that is no longer connected to the value.

In fact, the slider implemented in f4 is now referring to the global kernel variable x4. This can be verified by confirming the value of Dynamic[x4] both inside and outside the DynamicModule construct.

Since the system option impacts all code in the system, you may need to revert it back to its original setting to run code that has not had is scoping issues corrected.