Hello,
In Telemac-3D, because the continuity equation is solved first to get the depth, this dynamic boundary condition is included in this equation (like it is to get the shallow water equations). We may choose a posteriori to enforce again this condition at the free surface, by correcting the vertical velocity. You may see an effect on waves, when dealing with non linear waves, otherwise it has little effect.
With best regards,
Jean-Michel Hervouet