As a bulk supercooled liquid approaches the glass transition temperature, spatiotemporal fluctuations in dynamics increase by orders of magnitude. While this effect is fundamental to the glass transition, few have studied how confinement affects this dynamic heterogeneity. Here, we examine this effect in thin films through the lens of the dynamic phase transition from high- to low-mobility dynamic states in a set of model freestanding thin films. We find that changes in this dynamic transition are similar to deviations in thermodynamic transitions under confinement due to capillary condensation. Furthermore, these changes are reminiscent of several atypical features of the glass transition observed in ultrathin film experiments, suggesting a possible link between our simulations and experiments.