An "Old school" Vegas veteran showed me the use of diminished chords used as "passing chords" on the bandstand in the late 60's.
At the time, the band was an Eddie Arnold kind of group, and the use of a diminished chord to transition from Cmaj 7 to Fmaj 7, instead of a Dmin 7 was as much a vital part of stylized music from a specific era as an expression of a level of competence, although proper use did separate the men from the boys.
Gotta love those diminished chords!
Good topic!
Russ