It wasn't dynamite at all. It was a smoke signal. That's how DD noticed the ship. He just stomped the barrel out from frustration over his conversation with Law.
I really don't think DD got degraded all that much this chapter. People seem to point out that in the past he's had a "don't give a fuck" attitude. I would point out that in the past he also didn't have any real liabilities to deal with either. As a Warlord he's had almost complete immunity from the WG to do what he wants. Now he's faced with losing that. In addition his alliance with Kaido is a relatively new thing that seems to have only been in place a couple years at most. Until now he's had no threat to it either. So yeah, his back is against the ropes here. His reaction is perfectly normal.