Players and dynamic vs static IP's

[BrianDelShasta]

I know this has come up before but it was never really clear to me at least...

Does anyone know what's actually happening in the background when you check or uncheck the "player has dynamic ip address' box?
I surmise the goal is to assign players based on the location/device for a single user, meaning if a user logs into a computer in ROOM A they're given PLAYER A, if they log into subsonic with the same account in ROOM B they get PLAYER B. I'm guessing this functionality would require the unchecked static ip variety?

I do not require this functionality. I would however like to stop the seemingly endless spawn of players though. I have upwards of 100+ players for a total of about 20 users. What's going on here?