Bob Dylan is a complete musical genius. He has excellent lyrical and composition skills - just because his most famous compositions are largely simple that doesn’t mean he’s not a great melodist. I’d much rather hear an excellent melody with three or four chords like Mr Tambourine Man than overly-complex, overwrought compositions. He also changed his arrangements regularly - even with his current largely static set list there are variations according to his mood, he’s not trying to replicate the album.
But above all else though he has an encyclopaedic music knowledge and the ability to absorb songs and lyrics like a sponge. He’s performed well over 800 different songs live including covers and could talk all day about folk, rock and roll, blues and jazz music through the decades. I recommend listening to his Theme Time Radio hour to hear his knowledge and taste.
It was said that when he was young he could hear a song once and be able to perform it back in his own style. He’s a master at his craft.