AbstractTm_1–xYb_xB₁₂dodecaborides represent model objects for the studies of quantum critical behavior, metal–insulator transitions (MITs) and complex charge-spin–orbital–phonon coupling phenomena. In spite of intensive investigations, the mechanism of semiconducting ground state formation both in YbB₁₂and in the Yb-based strongly correlated electron systems remains a subject of active debates. We have performed first systematic measurements of temperature-dependent spectra of infrared conductivity of Tm_0.19Yb₈₁B₁₂at frequencies 40–35 000 cm⁻¹and in the temperature range 10–300 K. Analysis of the temperature evolution of the observed absorption resonances is performed allowing to associate these with the cooperative dynamic Jahn–Teller instability of the boron sub-lattice. This ferrodistortive effect of B₁₂-complexes induces the rattling modes of the rare earth ions leading to emergence of both the intra-gap mixed-type collective excitations and the dynamic charge stripes. We estimate the temperature-dependent effective mass of charge carriers and propose the scenario of transformation of the many-body states in the multiple relaxation channels. We attribute the MIT to the localization of electrons at the vibrationally coupled Yb–Yb pairs, which is accompanied by the electronic phase separation and formation of the nanoscale filamentary structure of electron density (stripes) in Tm_1–xYb_xB₁₂compounds.