Yes, decline it every single time. Dynamic currency conversion is when a terminal or ATM offers to charge you in your home currency instead of the local one, framed as a convenience. The conversion rate applied is set by the merchant's processor and is consistently worse than what Visa or Mastercard would give you, often by several percent, with the difference pocketed as profit.
The screen wording is deliberately confusing: it may present your home currency as the highlighted or seemingly recommended option, or phrase it as guaranteed rate versus unknown rate. The correct choice is always the local currency of the country you're standing in. Your card network then converts at close to the real market rate, plus whatever foreign transaction fee your own bank charges, which you'd pay either way.
Watch for it at ATMs especially, where the with-conversion button is the trap, and check hotel bills and restaurant terminals since staff sometimes select it for you.