Here is the low down.
Diversion ( ad-blocker that utilizes the blocking capabilities of dnsmasq). Diversion is a beautifully written script by
@thelonelycoder . It is sufficient for those that are wanting to set it and forget it since it has stream line automatic block list updates and such. However, Diversion is confined to the functionality of DNSMASQ, but should be sufficient for the average user. Diversion has some Webui additions like some of the other add-ons. Similar, UiDivStats is an add-on that provides statistics for Diversion in the Web-UI.
AdGuardHome is all-in-one DNS Resolver and Ad-blocker that has a brilliant statistics Web-UI. Ad-blocking supports both filters, regex, and list style block lists. AdGuardHome allows users to use DoT, DoH, DoQ, and Dnscrypt as upstream resolvers. Also, AdGuardHome can act as a DoT, DoH, and DoQ server (with some additions and manipulations it can also serve dnscrypt). ( oh yeah, AdGuardHome can also act as a dhcp server like pihole).
Fundamental differences:
AdGuardHome is a single binary that achieves all of its above listed features.
Diversion is a conglomerate of beautifully written, and functioning, scripts written by
@thelonelycoder that achieves similar adblocking functionality. Diversions blocking capabilities are only limited by the capabilities of DNSMASQ(and pixelserv-tls if it is being used).
To better answer your question
Both AdGuardHome and Diversion can block malicious and ad-serving domains. (Basically any domain in your blocklist will be blocked at the DNS level.)
The final statement: Just because AdGuardHome has a lot in a single binary does not mean users should skip out on experiencing Diversion.
@martinr if you are content with your diversion setup, I would stick with it. If you are wanting to plunge into new stuff and want some of the adguardhome features, then maybe you should try adguardhome. Just remember to make backups, they are your best friend when experimenting.