Hi @Jason_Chapman, well your assumptions about both products are precise - except for the white paper, unfortunately there is none.
What can I say in addition to what you've already said? That's indeed the story of both products: In the beginning there was Diagram Studio only. Then a cross-platform diagram component was needed and FNC Blox was built from scratch because refactoring TMS Diagram Studio would take much more effort and backward compatibility would be needed. So it would cost more and the result will probably be a Frankestein`s monster.
The core of FNC Blox was designed by the same developer of Diagram Studio, thus indeed it's an "evolved" architecture from Diagram Studio, with more abstract things to make it cross-platform and to fix some structures that became a little outdated overtime in Diagram Studio.
Diagram Studio has more features because it's older but also because some features are hard to add to FNC Blox. For example, Diagram Studio has a full diagram editor ready to use - with menus, toolbars, dialogs, etc.. This is simply complex to implement in FNC Blox because it's cross-platform - everything that is used in the visual editor will have to be cross-platform, and also will have to behave the same and/or look good in all platforms (mac, windows, maybe web...).
So it's a decision that is up to you, there is no right answer. I think the main (but not only) question is if you are win32 only, or cross-platform. If you will are going to be win32 forever, go with Diagram Studio. If you need cross-platform, go with Blox.
If you are Win32 and "maybe" will go to cross-platform in future, then you have to weight what are the odds of such cross-platform need to happen, and what will be your need in it. If it's unlikely to happen, go with Diagram Studio. If it might happen, but your needs are simple - for example, maybe you don't need a full editor in other platform, just to visualize the diagram - then maybe you can start with Diagram Studio and use Blox just for the other platforms, since it will be easy to use it. If you will need full diagram capabilities in other platforms soon, and probably the diagram usage will look and feel the same in all platforms, go with Blox.
I hope that I have helped in your decision. But probably I didn't.