I think you misunderstood the process bro. You can very well take the Diploma or degree as you wish. There are no issues. The subject limit is there only to make sure that, students are gaining a better understanding of the subjects, rather than going through them by getting min passing marks.
Only thing is that if you're getting 60% marks regularly in the term exams, you will take more time to get the diploma, that's it. instead of 2 years - you might take 3 years. But you will get a diploma. But, the thing is that by improving your score (above 70%) in the next term exams you can get to the 4-subject group and can finish the diploma in minimum time.
Just to add I think you don't have to worry much about the first year. There are only 8 subjects in the first year. If you go for 4 subjects in a term, you can finish it in 8 months (2 terms). or you could plan like 3 - 3 - 2 and complete it in 1 year (3 terms). anyway, you'll be able to study the second year after 1 year only. Even though I've 79% I'll be registering 3 subjects in term 1, 3 in term 2 and 2 in term 3.