This article presents fault-tolerant dynamic allocation strategies designed to mitigate propulsion and actuation failures in launch vehicles using a clustered engine configuration. In particular, it addresses engine thrust loss and thrust vector control (TVC) jamming faults during the atmospheric ascent flight of a five-engine launch vehicle. Three different strategies are introduced: a fault-tolerant pseudo-inverse solution, a convex optimization-based approach, and a constrained nonlinear optimization one. These approaches are analyzed and compared at a linear design point and further evaluated using a nonlinear simulator of the launcher. The results demonstrate that these three dynamic allocation techniques are able to provide successful recovery from engine thrust loss failures (up to a certain level depending on the engine throttling capability), TVC actuator jamming failures, and simultaneous engine and actuator failures.