By enabling this feature, the Record Finder will be hidden in the form unless the user filled up the dynamic filter. To find this setting, you need to go to:
Form Fields
Click on the linked record field.
Filter Records section
Turn on Dynamic Filtering
Find Filter fields
Click on the filter field that you want to be required
Turn off the toggle: Allow adding linked records if this conditional filter is empty
The user can still create new records in the linked records field regardless if the required dynamic filter is populated or not.