I would say this is currency conversion, not dynamic.

Air New Zealand website can do the same thing. But it didn't stop me from actually paying in NZD. And of course paying in USD resulted more if the price was originally quoted in NZD.

Basically your product is quoted in one base currency, and every other currency will include a conversion loss sort of thing.

In this case AirAsia's system was having a problem and it self-denied IDR transactions. I had the same problem with Air China that the CNY transactions were denied on Chase cards. The difference is that Chase saw authorizations, but it wasn't Chase who denied them. Air China's system just though there was something wrong and stopped the transactions after successful authorizations.