"Diminishing return" refers to the overall value of repeatedly fertilizing, not to the actual items you get when you harvest. Fertilizing has zero impact on anything but the speed at which your plants grow and certainly doesn't hurt anything."We are currently working on a 100-fertilizer test to check this but most signs point to this not being true and there are diminishing returns when fertilizing."
https://www.ffxivgardening.com/fertilizer-analysis
The important word here is diminishing. This is the only place they seem to have tried to do some serious research into fertilizing, but the experiment seems to have stopped, for unknown reasons. Things aren't always straight forward in FFXIV, that I found out after just a few days of playing it.
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