Dynamic Level Arrangement

Dynamic Level Arrangement, sometimes abbreviated to DLA, is a portion of the Personalisation A.I. which will create new courses out of existing level geometry or textures. It is similar to Dynamic Level Rearrangement except on a much larger scale allowing it to create entirely new levels for the player to play.

Functionality
Dynamic Level Arrangement is able to alter level geometry, apply textures to the level, and even on very rare occasions create new level geometry. Typically Dynamic Level Arrangement has to take its aesthetic and object banks from other levels, meaning that they can feel very similar to existing levels. The algorithm is unable to alter object behaviours, or create unique textures, music and strings of text.

Unlike Dynamic Level Rearrangement, Dynamic Level Arrangement is much rarer. This is probably due to how much larger scale it is compared to rearranging levels. This can be seen with how collision on these arranged levels can be buggy and inconsistent.

Delicious Cake
A supposed level involving a cake has been rumoured to be in Super Mario 64 for quite a while, and has even been backed up by video proof by Jefftastic. An unused string for "Delicious Cake" can be found in the game files, with nothing tied to it, aside from it being placed near strings for level names.

This has led many to assume that the Delicious Cake course is a case of Dynamic Level Arrangement. However, this can be disputed as the level does not reuse any assets from existing data, with the exception of the "Delicious Cake" string.

Drip, Drip Cave
A supposed course hidden inside Dire, Dire Docks. It is accessed by clipping through the hatch in the submarine area of Dire, Dire Docks before Bowser in the Fire Sea is cleared. It is a long cave that stretches down a long path filled with water, leading to a sunken ship similar to Jolly Roger Bay.

It's reusing of assets from previous water levels indicates this could be a case of Dynamic Level Arrangement.