1.16.5 contains important stability and security fixes for Minecraft servers.
Is dynmap compatible with this version? If not, what should be done to make the plugin compatible with it?

Nice, guess this can be closed. Still, it would be nice to see it mentioned in the docs.

I'll send a pull request with the additions to the docs @Tachi107

I'll be checking right now, let me grab it (3.1-beta-6) and start my server. I know that the version on the Releases page (3.1-beta-2) does not work.

Aaaaand 3.1-beta-6 works on Paper 1.16.5 (463) no extra steps required.