Lords of Thunder desert level.
The desert sand appears to be line scrolls, but they are not. Not in true fashion. They are dynamic tiles. There are only like 6-8 of them vertically and they repeat the tile horizontally via the tilemap. You update any single tile of pattern and the rest of the tiles horizontally are updated automatically - because the tilemap is pointing to that single tile for a lot of entries. The way LOT is using it, you get a scroll "layer" every 8 pixel. Now, the upper buildings and mountains are using the linescroll method, or more precise H-int's (Horizontal interrupts), just not on every line. Their data would be too much to implement on a dynamic system. They have not complex overlapping parts, so it's simpler to use a H-int method.
Now, the large sand creature is also made up of mostly BG tiles. You can see in the third pic the "sprite" parts of the creature.
If you look at the last pic, I edited the palettes of the dynamic tiles (and upper planes too) so you can see just the tiles of the creature. If the creature was made up of all sprites, there would be some considerable flicker. And since you can't use H-int's and have the creature as BG tiles on the same lines, they used dynamic tiles. The tiles around the creature are updated to give the scroll effect. But... the tile edges of the creature, the outside parts that contain 'sand' graphics, are not updated. So if you look
really closely while the game is in action, you can see this. The fact that the colors are kinda gradient and only scroll every 8 pixels tall (the scroll height), makes it really easy to get away with this.
If the dynamic patten was more pronounced, they could have made dynamic tiles for the outside edges of the creature as well. But in this case there's no need to.
Lords of Thunder uses lots of dynamic tiles through out the game. The first part/area of the water level uses them too.
The water parallax is done with dynamic tiles, same as the sand. This more easily allows overlapping parts like in the circled area in the pic, without using sprites.