Based on my observations, it is an indication that Dynamax is available to use. Mostly, I see it doing Raids, where you can Dynamax on the first turn, or every 4th turn after that (the option rotates through the party if you don't use it). It also comes up in the Stadiums for the Gym Challenge battles, as well as the rampaging D-max Pokemon from the post-game Swordward/Shieldbert storyline.
