I can shed a little light on this subject with what I believe to be a degree of accuracy.
Initially buying it for health reasons, I also began experimenting with diatomaceous earth as a cheap polishing compound on cork wheels to polish out glass on my lathe. I LIKED the results. It leaves a nice polish.
When the wet slurry first hits the glass, one can hear the lite grinding whoosh sound it makes as it attacks the glass. The slurry is sort of slimy. . .so maybe it is not as active as completely dry DE. . . can't vouch for that for sure, but I CAN tell you that it DOES GRIND< and that means it is still in a hard partical form to some degree or another. I say this means it MUST work when wet.
I can also tell you that when I give DE to my kitty mixed in with his food, his runny, bloody stool shapes up very quickly (as long as I give it to him now and again, he remains okay) . This also tells me that it works wet.