This is actually a description of the "cty" library's encoding of refined
values, but from the perspective of the plugin protocol it's an
implementation detail that Terraform Core outsources that to a third-party
library, and current server-side implementations of the protocol use an
independent implementation of this format which will need to be compatible
with what cty does.
Although we have in this same directory the protocol buffers schemas for
the static parts of the provider wire protocol, many of the protocol
messages include DynamicValue messages that are presented in a nested
dynamic serialization format.
That format was previously not documented, and was thus defined only by
the implementation. Terraform happens to use a third-party library to
implement parts of this encoding, which means that the rules were even
harder to track down from reading the code.
Regardless of how Terraform happens to implement its serialization and
deserialization of DynamicValue, it's the wire format that is contractual
and so this document is an implementation-agnostic description of the
mapping rules for serializing any Terraform Language value by reference to
a provider-defined schema.
All future changes to the rules described in here must be backward
compatible until protocol major version 6, which is not currently planned.