Your choice of dilution affects both extraction if you pre-steep, and it affects distillation too, since the starting proof will affect the temperature at which you distill, and hence how the aromatics come across in the distillation. You can separate these functions to some degree by extracting at higher proof and diluting before distillation. You can fine tune the extractions by separating the botanicals for steeping at different proofs, then recombining for distillation. Or go whole hog, and extract and distill each botanical separately. Or any combination thereof. All these allow the distiller to tweak the flavor profile, in addition to the choice and proportion of botanicals. Or use a gin basket. Or throw some botanicals in the pot without steeping. There is no "right" answer, experimentation in this (and all the rest of the distilling variables) is the fun and art of gin making. By the way, trying to "stay true" to the flavor profile you get in an extract gin going to a distilled gin is probably not possible or desirable per se, and certainly it won't be just an issue of proportional strength. That is because all the various congeners that make up your flavor profile from the botanicals will distill over in different relative proportions, and may even break down or react, depending on specifics of your still and process. Have fun.