@babyloner, in reading the latest replies, I was reminded of another thread that was asking similar questions. In this case the problem was adding a custom decal on a skateboard deck, but the problem is largely the same here in terms of blending the multiple textures together. I went through some of the UVing considerations and worked up a simple node material to show how to blend multiple textures together. You would still use the dynamic texture approach from before and assign those textures to the texture block in your node material.
The reason to blend these all in a shader is that you still want to show the material of the object you are putting your image on. In @mawa’s example of the mug or pen, you can still see the substrate material in the negative areas of the image like the counters in the type or the negative space in the logos. If you were to use a multi-material, you would still need to have your substrate textures blended, so it literally does no good to use it as it can’t blend the substrate material and your graphic together on its own.
You could float geometry slightly off the base model and just apply your dynamic texture to that, but you would be met with a lot of overdraw costs and depending on how close your printable areas are to one another, potentially some sorting issues.
Blending your base material and your printed graphic in the shader will also allow you to do things like change the roughness of your base material in the silhouette of your graphic so that you can simulate ink on a glossy surface for example. This will benefit the specular highlights of your render and make the graphic feel like it’s applied to your product as it would in the real world. Since you have control over each channel into the lighting calculations, you could simulate a foil stamp by controlling metallic values, you can control specularity by controlling roughness, and you obviously control the base color by blending your graphic on top of the base color. All of these parameters will make your product feel more real to the user. I hope this helps clear up some of your questions.