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I heard there was a nice scene if you don't save it, so I opt to first not show the diary.
She thinks, but alas, there isn't a way to save it that she knows. We have to put it down.
Since can't bring herself to kill it, and so we have to do the dirty work again, which is understandable, I suppose.
Unfortunately, the scene after you fight it proceeds as if you showed her the diary if you have it with you, so I can't see how the Garbodor absorbs the bomb and blows it and itself up.