Taxation is theft. Dilution is not a tax, therefore it is not theft.
That is faulty logic.
Assume taxation is theft. Even then, not all theft is taxation. Not being a tax doesn't mean that something isn't some other kind of theft.
Here's the same logic with different nouns: Cryptocurrency is money. The US dollar is not a cryptocurrency, therefore it is not money.
Well, I'm glad someone is holding my feet to the fire.