When affected by dolphin's grace, it basically works the same way as depth strider, which is intended to make you travel across the water faster (as Jeb has said a while ago). Dolphin's grace, unlike depth strider, is intended to make you actually swim faster in any direction, so that you can dive faster. However, this is not the case, and Dolphin's grace turns out to be annoying when trying to dive (because I move too fast horizontally), and it is also no different that depth strider.
MC-130268
Dolphin's grace only affects horizontal swimming speed
Open
17
(Unassigned)
Confirmed
Gameplay
Normal
Player
Minecraft 18w21b, Minecraft 1.13-pre1, Minecraft 1.13-pre6, Minecraft 1.13-pre8, Minecraft 1.13, ..., 1.20.2 Release Candidate 2, 1.20.4, 24w14a, 1.21.3, 1.21.5
Retrieved
Probably relates to MC-129576
Edit: The source that it is intended for depth strider to only work for horizontal swimming speed is in the MC-66140 comments. There is also no current evidence that dolphin's grace is intended to function exactly like depth strider.