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Yeah you risk losing some flavour, there's definitely a sweet spot. I prefer to make the brew slightly weaker and dilute less. I've had ones from cafe's before that were a strong brew and undiluted, I just find them too much, I'd rather have something that's easier drinking and doesn't give me heart palpitations.
Just brew it as you like, play with it a bit, there's no point just sticking to some else's recipe as you've got different beans, water, fridge tempurature etc.
I've been going 50/50 with milk and it's still making me slightly edgy! Wouldn't diluting it that much lose most of the flavour too?
I was getting a drink I thoroughly enjoyed using probably 20g coffee and ~400 mls water so going back to something closer to that...