Do not dilute the two solutions.
Bath A will not keep if diluted -- mixed as directed, it has a virtually unlimited storage life and can be reused until the volume is too small to cover the film. Diluted, the preservative will be unable to prevent oxidation of the developing agents and the developer will go bad, possibly without warning. Diluting Bath B would slow down the process, but you would gain nothing relative to the streaking you describe. In addition, dilution (especially of Bath B) would be likely to increase grain, because both solutions contain lots of sodium sulfite that acts to control grain size.
When I develop in Diafine, I give five inversions in 10-15 second on filling and at 1 and 2 minutes in Bath A, 2 inversions on filling and at 1 and 2 minutes in Bath B; I've never seen streaks. "Gentle" agitation is as opposed to the cocktail shaker agitation advised for some developers; especially in Bath B, one doesn't want to wash the residue of Bath A out of the emulsion too quickly.