I've struggled with this for a while, until I finally figured out the way, in which Apple UX designer intended for us to use this feature: "If dictation isn’t sure what word it heard, you'll see a blue line under the transcribed word so you can check it for accuracy. To make corrections, tap the underlined word, then select the correct spelling. To replace a word, double-tap it, tap the microphone button , then say it again, and tap the keyboard button iPhone keyboard."
here is the list of all supported commands, and delete isn't one of them: https://support.apple.com/en-us/HT208343
The good news is, if dictation made a mistake, you can just tap the keyboard button, then tap on the underlined word, and it will show you the alternatives. This works pretty well for me. Cheers!