In Static Instrumention, with reference to a sentence mentioned here:
"Inserted instrumentation code is executed as a part of target executable or library providing the means to access internal data"
What about dynamic Instrumentation? Does that mean that with Dynamic Instrumentation the instrumented code does not run as part of the executable process? Is it correct to say that with Dynamic Instrumentation the instrumented code runs as separate process than the target?
No, it is not correct to say that, in both cases the instrumentation is running in the same process as the application.
The difference is the time that the instrumentation is added to the application. In the tool provided in the attached link, the instrumentation is added to the binary before the application is running, i.e. added to the "static" binary. While in Dynamic binary instrumentation frameworks (like Pin or DynamoRIO) the instrumentation is added during the application execution in a JIT approach: While the application is running, the dynamic binary instrumentation framework is adding instrumentation (analysis code) to pieces of the application that are about to be executed.