Randy,
Unless the Pi 4 is designed differently from the Pi 3, the reason for the 5.35V (at least 5.1V) of the Pi's recommended power supply is in the circuitry from the Pi's onboard voltage regular. It is just not very good.
If you feed power in to the PiDP's 5V connector, you should not need it, and 5.0000V should be OK. Still, 5.1 or 5.2V is better (almost all Pi power supplies now deliver it anyway). You can then indeed short that voltage drop diode, the LEDs will burn a bit brighter for it.
BUT! Do make sure you add a wire from the keyswitch to close to the Pi's 40 pin connector. I designed the PiDP PCB in the Pi 2 times, and never thought the traces needed to carry this much current. The Pi 4 is power hungry... so running the power just over the PCB traces is marginal. With 5.35V you'll still be OK, with 5.0000V maybe not. There have been postings about this issue in the group.
Feel free to experiment, no risk of damage.
Kind regards,
Oscar
(not quite an electrical engineer, as it turned out...)