I have this very same issue and I can’t get it to work either. I’ve been trying for weeks on and off. I manged somehow to get it to work in the old editor but I had to do it as just standard pages so I couldn’t use dynamic pages at all - which kind of missed the point.
I have catergories/ collections - with products in those collections. I want the same thing - a page to show all the collections at the top level - and then a second page to show the products within each top level. I can’t get it to work at all. Its a nightmare because looking at the instructions it should be really easy!!! It doesn’t work though sadly which, like Martin D, will mean creating 100 plus pages for every single catergory/ collection.
Checking the link above - this is worded is a really confusing way - it doesn’t make sense to me but aware it will to others. What I don’t understand is why if I have a category page showing plants - the next page doesn’t just have the ability to show everything in the category plants? I thought that’s what dynamic pages and datasets were supposed to do?