I just had to deal with a similar situation, and in my experience, the retest wasn't observed. YMMV, however.

I'm sure somebody on here will correct me if my logic is faulty, but it seems to me that even if the sample is diluted, you're still dealing with a presumption of innocence and a corresponding right of privacy. Even if they do try to observe it, you can still sub if you just pitch a fit about being pee-shy and demand some privacy. When ours came back diluted, we decided to sub with Quick Fix 5.7 and it worked like a charm. I'd definitely recommend that route.