Correct it still fully backs up the entire zimbra directory. The difference is that the "diff" backup runs the rsync while zimbra is still running and then shuts down zimbra and runs the rsync again. This will cause pretty much nothing but the log files to have been changed between the two syncs (and any email's received since the live rsync occurred)
If you have LVM setup on your zimbra partition then you have a much better option available. With LVM you can simply shutdown zimbra, take a snapshot, and start zimbra again. Run your backup on the snapshot, and then remove it when done. Your total downtime is only the time that it takes your server to shutdown and then start zimbra (the snapshot is virtually instant).
https://support.ginsys.be/svn/zimbrackup/ This is an excellent script if you do have LVM setup on your system.