It sure does need to be diluted! The most recommended ratio I've seen seems to be 1:100 - and that's before adding it to a DIY mix!
I think that's where even a lot of vendors go wrong...even when you buy the "tobacco Absolute Diluted" it's only diluted to 1:2, it still needs to be diluted 1:50 more before using drops of it in a mix.
It opens up and becomes a much more pleasent thing when it's very diluted.
EDIT: I guess you might get by without dilution for very large batches. For me I think 1 drop of pure tobacco absolute would be enough for somewhere around 200ml of my current favorite mix recipe if I ever decided to make a batch that large. I would use 2 drops of the TA Diluted 1:2 stuff though because it's easier to handle and I think I read that it's important to use grain alcohol for that initial 1:2 dilution.
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