In opposition to what you might expect, the Diesels have some benfits:
Smoke. Under full power, the Deisel engine can operate completely smoke free (unlike steam), this was demonstrated by Scheer a few times in the indic ocean, when the ship prevented beeing spotted by full power smoke free cruise. The Panzerschiffe had a special device to prevent smoking by heating the exhaust gazes (and therefore burn parzicles), similar but more effective than those used on submarines.
Another advantage is the high efficiancy and economics of those powerplants (Lutzow was the ship with greates operational range: 20.000 nautic miles / 13 kts.).
Diesel fuel is a bit more flammable than oil but not by that much, indeed a temperature is needed, which at all would inflame oil as well. The burning is not that intensive compared to gazoline, avgas and so on.
The spacial dimensions of Diesel engines are also smaller than boiler and turbines, but nethertheless they are heavier (compared to the amount of HP created by them).
The full run from zero is possible in within a minute, unlike turbines which require some 5-13 minutes to do so, fuel is not needed if the powerplant is brought to zero.
The complement can also be reduced, since operating Diesels require far less personal than operating turbines.
Not the least, the ship is more immune, since the great danger of boiler hits (which usually were critical, since they had the potential to rip the ship ) is banned. If a engine room is hit, than ok-you loose power, but the ship cannot blew up (or take further damage due to steam bursts).
Of course there are negative aspects as well:
The Diesels were heavy units compared for their poweroutput,
While beeing much shorter and narrower they require more height than turbines (this was the very reason to skip them from the Bismarck design, because they would need to place the armor deck a level higher (reduced stability, reduced immunity from very close distances, no two deck deep zitadell = much thicker armor thicknesses needed) as they did in case of Lutzwo, Scheer and Graf Spee.
Unlike turbines, the Diesels cannot be overrewed (enforced power) that much (Iowa had 20% design overrew!).
The vibrations and sounds caused by those units were uncomfortable.
The Battleships of the High Sea fleet indeed had some problems with the tech, only two of them eventually had mixed propulsion (Diesel for the middle screw, turbines for the two others), some other already produced units were used in large submarines, but statisfyingly. Concernes were that there were no records how the engine would work under battle circumstances (impacts).