Can the Serial Communication protocol of an M340 PLC be changed dynamically?

Yes the Serial Communication can be changed dynamically from Modbus Master, Modbus Slave, or Character mode by using a WRITE_CMD (%MWr.m.c.24.bit) and toggling bits 12, 13, or 14 respectively.
Example:
1) Bit 12 = 1, bits 13 & 14 = 0 Current protocol is changed to Modbus Master
2) Bit 13 = 1, bits 12 & 14 = 0 Current protocol is changed to Modbus Slave
3) Bit 14 = 1, bits 12 & 13 = 0 Current protocol is changed to Character Mode