Dynamic Binding

By default, the local variable bindings made by Emacs are dynamic bindings. When a variable is dynamically bound, its current binding at any point in the execution of the Lisp program is simply the most recently-created dynamic local binding for that symbol, or the global binding if there is no such local binding.

Dynamic bindings have dynamic scope and extent, as shown by the following example:

(defvar x -99)  ; x receives an initial value of -99.

(defun getx ()
  x)            ; x is used free in this function.

(let ((x 1))    ; x is dynamically bound.
  (getx))
     ⇒ 1

;; After the let form finishes, x reverts to its
;; previous value, which is -99.

(getx)
     ⇒ -99

The function getx refers to x. This is a free reference, in the sense that there is no binding for x within that defun construct itself. When we call getx from within a let form in which x is (dynamically) bound, it retrieves the local value (i.e., 1). But when we call getx outside the let form, it retrieves the global value (i.e., -99).

Here is another example, which illustrates setting a dynamically bound variable using setq:

(defvar x -99)      ; x receives an initial value of -99.

(defun addx ()
  (setq x (1+ x)))  ; Add 1 to x and return its new value.

(let ((x 1))
  (addx)
  (addx))
     ⇒ 3           ; The two addx calls add to x twice.

;; After the let form finishes, x reverts to its
;; previous value, which is -99.

(addx)
     ⇒ -98

Dynamic binding is implemented in Emacs Lisp in a simple way. Each symbol has a value cell, which specifies its current dynamic value (or absence of value). See Symbol Components. When a symbol is given a dynamic local binding, Emacs records the contents of the value cell (or absence thereof) in a stack, and stores the new local value in the value cell. When the binding construct finishes executing, Emacs pops the old value off the stack, and puts it in the value cell.

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https://www.gnu.org/software/emacs/manual/html_node/elisp/Dynamic-Binding.html