To get lower contrast prints you need to overexpose the paper. It is the same overexpose/underdevelop routine as with film. It doesn't work as well with paper as it does with film as paper is designed to be developed to completion.
Overexpose to the extent that the print has decent blacks when developed for 2 minutes in the dilute developer.
The results will be decidedly muddy unless you are using a very contrasty negative.
The reason for the dilute developer is to give uniform development while still underdeveloping. If regular developer is used and the print is pulled before development completes - say with only 20 seconds of development - the print will be mottled.