I've always avoided the wash-in, since it would treat the inside also and for goretex to work best, you don't want that inner layer hydrophobic. I've only used the spray on, with no heat treatment. I'd follow the instructions, likely they don't call out diluting. But if you do multiple applications, you'd probably be fine diluting, and might get more/better/even coverage than one full-strength layer?
I am a river, babe - I've got plenty of time, I don't know where I'm going, I'm just following the lines..... - "We are water" by Shaye