VIPs are an attempt at bringing an additional bit of personality to each of the player's settlements by having settlers with unique stories that have alternate/additional clutter in their homes.
How They Work
The word "choose" was on purpose due to the current mechanics requiring a specific residence type in order for the VIP status to be apparent, as the clutter was designed for a specific residence and thus would look garish in a randomized setting, however kinggath will address this in a future update. This also implies that it is better to have as many different types of homes in your settlement in the hopes that the VIP will choose their designated one.
The nature of the VIP is different compared to normal settlers in that they have their own story to tell through their personal clutter, and encourages the player to return to their settlements and look through the different homes to gain a glimpse into the lives of their residents.
An example of this would be a settler having samples of seedlings in their home at level 2, which upon upgrade to level 3 would turn into a magnificent and dominant tree in the middle of their home that can be seen from far off.
In essence, VIPs help enrich the experience of exploring the player's settlements with different and unique stories that help immerse the player in the game that the settlers are people rather than simple mindless drones that behave in an identical manner.
Clutter in the Sim Settlement plots comes in two forms, namely VIP clutter, which remains persistent, and randomized clutter, which will be the main focus here.
Randomized clutter is an attempt to bring a sense of life to the player's new settlement by both breathing life into the plots, simulating the haphazard nature of people stamping their personality on their surroundings, and a sense of lifestyle in a dynamic nature, by having bits of clutter change whenever the player leaves and returns.
An example of such goes as follows; the player might enter a settler's residence and notice a meal having been laid out on a table, but when the player leaves and then returns after a while the meal will have gone (the settler having eaten) to possibly be replaced by some drinks or number of books. This helps bring a sense of dynamic lifestyle, of the settlers leading their own lives outside of the influence of the player, instead of having a set of clutter that remains static until changed by the player.
This clutter is flavoring to the different styles of plots, rather than having two identical plot rotations next to each other that would look and feel exactly the same, instead will be filled with random clutter so that the places would look like there were actual people living in them as part of their everyday lives. This leads into the sense of exploration that is one of the main focuses of the mod, allowing the player to enter the settlers' homes and take a peak into their lives.
Additionally, as the level of the plot increases, the amount of clutter present on the plot increases as well. This is most obvious in Residential plots, however it can also present itself in the other plot types but in a less obvious, randomized way.
Thank you to Nexus users Boto 9 and Devonapple for the screenshots.
Quick Overview of Dynamic Needs
So, rather than always requiring the same amount of water, food, and power, those numbers can change based on a number of factors.
Things like the level of your buildings, the total number of plots (of all different types) you have (in that settlement), the number of stores, even the VIP's can affect it - essentially everything you build in Sim Settlements can have little effects on the needs that your settlement has.
As you build out your settlements your settlers will respond to what you build and how you manage their settlement, and as a result their needs will change over time as their settlement grows - hence Dynamic Needs.
The 999 Problem
If a settlements resources are at 999, it means that the resources are being used into a deficit. The vanilla Fallout 4 settlement system cannot handle negative numbers, so the resource count jumps to 999. This can be due to Dynamic Needs being on. With dynamic needs, some structures will require more Power and Water to run and may reduce other settlement numbers such as Food or Defense.