Q:

Dynamic paint erase paint doesnt work?

Ok, I am trying to achieve exactly what this person did with weight painting but with output to material - the circle of "intersection" depends on the proximity of the brush object to canvas, so gets smaller when goes away - 
Cycles, shade based on proximity to another object's geometry
I followed the linked tutorial and it is working for material, however after I move the object away again the paint is still there -

I tried checking the Erase Paint option, but this did nothing -

How can I make it follow proximity AFTER it touches down? Im in cycles obviously

A:

On the Canvas there should be Dynamic Paint Advanced options. This includes 'Dry' and 'Dissolve' settings. The 'Dry' allows your 'wetmap' to dry over time whereas the 'Dissolve' setting allows your paint to revert back to its initial colour over a series of framee - in my experience you should only enable one of these two options as the 'Dry' seems to disable 'Dissolve'.
Enable 'Dissolve' and set the number of frames to the number of frames you want the paint to remain - if you want it to instantly revert then set it to '1' and uncheck 'Slow'.

This should produce something like the following :

Note also that the dynamic paint treats timeline frame 1 as a special case where the paint is automatically reset and rendered. If you are on a different frame the dynamic paint will not automatically update in the viewport.

