It definitely covers better - particularly if you free throw. I experimented extensively with both and u can use less cheese with diced. Why? Because it spreads more uniformly around the pizza. If you free throw, that variation causes the maker to put additional cheese on the pizza to fill in the pace. But even if you don’t free throw, the finer cheese is going to allow a more uniform distribution. To take it to the extreme, If I have a circle and want to fill it in with a group of blocks (each group of blocks having the same surface areas the circle) I can do a more thorough job of filling in the circle completely with very small pieces than I can with large, overlapping pieces).
More importantly though, the density of diced is more uniform which means you can use volumetric measurement rather than weight. I promise you that a “cup” of diced cheese is going to have way less variance than a “cup” of shredded cheese if you measure 100 cups and compare their weight. This is particularly true if you introduce a variable of the person filling the cup. Of course if you weigh your product, it really doesn’t matter one way or the other…