The Library Download (Pull methodology) hosting option also lets you self-host the library files. When an authorized dynamic tag management user makes a change in the software, dynamic tag management writes those changes to the library files. When you host the library files on your servers with this option, dynamic tag management must get those changes to your servers. With the Library Download hosting option, dynamic tag management sends a ping (an HTTP post) to your system to let your servers know there has been an update to the library files.
For more Information on How Library download works in Dynamic Tag Management ?. Please check the following link.