H2SO4 has strong affinity for water. If it is concentrated, that is, more concentration of sulphuric acid is present, then it can remove water from the compound.
But when it is diluted, then large amount of water is already present around it, therefore it will not act as dehydrating agent.
H2SO4 act as oxidising agent by gaining electron to form SO2 , H2O and SO42-, thus it itself is reduced.
2H2SO4 + 2e- SO2 + 2H2O + SO42-