I think that it is important to explain here that first generation masking is always going to create a reduction of contrast. Whether that is of color materials as addressed here or if it is of black and white materials.

The best first generation masks are made from conventional continuous tone panchromatic materials. I have made contrast reduction masks from ortho lith film using highly dilute Dektol as the developer (usual dilution 1-30). The best masks for this purpose are unsharp masks and one does not need pin registration equipment to do unsharp masking.

As others have mentioned the reason for contrast masking of transparency material is that the exposure scale of the transparency will typically exceed the exposure scale of the paper. At least that was my experience when I did color over twenty years ago.