With default INI settings, Skyrim VR does not use large references. If it is clear that the large reference system will not be used at all - uLargeRefLODGridSize = uGridsToLoad - a single DynDOLOD.esp can be generated. Set IgnoreLargeReferences=1 in ..\DynDOLOD\Edit Scripts\DynDOLOD\DynDOLOD_SSE.ini before generating LOD from scratch.
Make sure to clean and error check the load order with xEdit before running DynDOLOD. Typically something like Skyrim VR - USSEP 4.2.2 and SSE 1.5.97 Compatibility Patch is required to fix unresolved and other errors in the load order. Refer to modding guides how to setup the base game properly.