Ultrafast electron−phonon relaxation dynamics in graphene hides many distinct phenomena, such as hot phonon generation, dynamical Kohn anomalies, and phonon decoupling, yet it still remains largely unexplored. Here, we unravel intricate mechanisms governing the vibrational relaxation and phonon dressing in graphene at a highly nonequilibrium state by means of first-principles techniques. We calculate dynamical phonon spectral functions and momentum-resolved line widths for various stages of electron relaxation and find photoinduced phonon hardening, overall increase of relaxation rate and nonadiabaticity, as well as phonon gain. Namely, the initial stage of photoexcitation is found to be governed by strong phonon anomalies of finite-momentum optical modes along with incoherent phonon production. The population inversion state, on the other hand, allows the production of coherent and strongly coupled phonon modes. Our research provides vital insights into the electron−phonon coupling phenomena in graphene and serves as a foundation for exploring nonequilibrium phonon dressing in materials where ordered states and phase transitions can be induced by photoexcitation.