Additive Friction Stir Deposition (AFSD) has emerged as a promising solid-state technique for manufacturing large-scale 7XXX series aluminum components, offering refined microstructures with minimal solidification defects. However, the interplay between precipitate evolution and dislocation/substructure dynamics during multilayer deposition, particularly in the post-dynamic stage, remains inadequately understood. This study systematically investigates the microstructural evolution of AFSD-processed 7075 aluminum alloy through multiscale characterization of dislocation density, precipitate distribution, and substructure morphology. Key findings reveal that η/η′ phases partially dissolve during the dynamic stage, forming Grain Boundary Precipitates (GBPs) and Intragranular Clusters (IPCs), which stabilize grain boundaries while retaining substructures. Subsequent cooling within the η/η′ precipitation window triggers GBPs/IPCs dissolution and static recovery, enhancing grain boundary mobility and reducing dislocation density. Post-dynamic cooling further homogenizes GBPs/IPCs, enabling nucleation of new precipitates (η′, η, Al₂Cu) that generate interfacial dislocations to accommodate lattice mismatch. These interactions, coupled with insufficient thermal activation energy, stabilize dislocation networks and substructures (e.g., dislocation loops, low-angle boundaries) within recrystallized grains, ultimately triggering their transformation into substructured grains. Crucially, the inherent thermal cycling in AFSD induces heterogeneous microstructures, highlighting the necessity of location-specific heat treatments tailored to GBPs/IPCs distributions to ensure uniform post-processing.