Not only can you dilute more for N-2 than you would for N-1, N, etc., but you can also agitate less (assuming you're not using a continuous agitation process like a Jobo). I've found with HC-110 Dilution E or G that I can reduce agitation a great deal without causing problems, and reduced agitation, especially with a dilute developer, can increase compensation, which reduces overall contrast (though it also tends to compress highlights relative to shadows, which can be good news or bad news depending on the scene) -- essentially, agiation or no, the shadows get the same development for a given time, but the highlights develop a bit less if there's less agitation due to local exhaustion.