DoF and diffraction. Depends on how you understand DoF. Diffraction increases the minimal attainable CoC size, so DoF as blur below the visual acuity of whoever is viewing the image under a given set of circumstances decreases. DoF as the visual difference between sharp and unsharp increases. More DoF, but overall less sharp. Better lenses have less DoF at the same aperture. And yes, if the medium is not up to the job of resolving what a lens projects, we do not get to see differences in the range beyond the medium's capabilities. So more DoF, but less resolution, regardless of lens and diffraction.