I'm confused about what exactly is the "dipping sauce" referred to in the last step. It looks like everything goes into the marinade; is that the...

I make and love their fusion salad. I really should get their cookbook. The chicken sounds amazing. Here's a link to the salad.

https://food52.com/recipes/28797-jeffrey-alford-and-naomi-duguid-s-luang-prabang-fusion-salad

It looks and sounds delicious but I'll admit that I had to read the recipe three times to understand it. Rather than try to explain how I read it, I've copied (and moved appropriately) the recipe into the different sections below. (This is what I'll be using to make the recipe!) Hope that helps.

For the grilled chicken (with peppercorn-cilantro root paste):

2 teaspoons black peppercorns
2 tablespoons garlic, chopped
3 tablespoons cilantro roots, chopped
Pinch salt
1 teaspoon fish sauce
3 pounds chicken parts, cut into 10 to 12 pieces total

In a mortar and pestle, or a small blender or food processor, pound or blend the peppercorns and garlic into a paste. Add the cilantro roots and salt and pound everything into a paste again. Stir in the fish sauce.
For the grilled chicken: After you've stirred the fish sauce into the peppercorn-cilantro root paste, toss the chicken parts in the mixture and marinate at room temperature for at least an hour or up to three hours in the fridge. Prepare your grill. Remove the chicken from the marinade and grill until it is a beautifully golden brown and its juices run clear. Serve alongside the dipping sauce.

For the sweet and hot dipping sauce:

1/2 cup rice or cider vinegar
1/2 cup sugar
1 to 2 cloves of garlic, chopped
1/4 teaspoon salt
1 and 1/2 teaspoons dried red pepper flakes
2 tablespoons fish sauce

For the dipping sauce: In a small saucepan, heat the vinegar to a boil. Add the sugar, stirring until it dissolves, then lower the heat to a simmer for 5 minutes. In the meantime, pound or mash the garlic and salt into a paste in a mortar or on a cutting board with the side of your knife. Stir the red pepper flakes into the sauce. When the vinegar and sugar mixture is done simmering, stir in the garlic paste and fish sauce and let the sauce cool to room temperature.

That is confusing. I probably would just use part of the sauce for the marinade and save some for the dipping sauce. Bringing it to a boil is going to change the flavor. Here is a link to the original recipe.
http://www.foodandwine.com/recipes/thai-chicken-with-hot-sour-salty-sweet-sauce