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Selectivity in organic chemistry is generally presumed to arise from energy differences between competing selectivity-determining transition states. However, in cases where static density functional theory (DFT) fails to reproduce experimental product distributions, dynamic effects can be examined to understand the behavior of more complex reaction systems. Previously, we reported a method for nitrogen deletion of secondary amines which relies on the formation of isodiazene intermediates that subsequently extrude dinitrogen with concomitant C–C bond formation via a caged diradical. Herein, a detailed mechanistic analysis of the nitrogen deletion of 1-aryl-tetrahydroisoquinolines is presented, suggesting that in this system the previously determined diradical mechanism undergoes dynamically controlled partitioning to both the normal 1,5-coupling product and an unexpected spirocyclic dearomatized intermediate, which converges to the expected indane by an unusually facile 1,3-sigmatropic rearrangement. This mechanism is not reproduced by static DFT but is supported by quasi-classical molecular dynamics calculations and unifies several unusual observations in this system, including partial chirality transfer, nonstatistical isotopic scrambling at the ethylene bridge, the isolation of spirocyclic dearomatized species in a related heterocyclic series, and the observation that introduction of an 8-substituent dramatically improves enantiospecificity.