Originally Posted by NitroVein

That's not entirely true, up to the point of too high squish velocity the engine will be able to produce more power over the entire rpm range and use less fuel with a smaller clearance. But you might need to offset it with different glowplug and/or manifold.
There is usually a couple of sweet spots as well where it's pretty happy even if you change the nitro slightly, but the design needs to be good.