The diary format forces you into a character's most intimate, unfiltered space, and the transformation often sneaks up on you through inconsistencies and changing priorities in the entries themselves. A character might start meticulously recording the weather as a way to impose order on chaos, but six months in, those notes are replaced by frantic sketches or half-finished sentences. That shift from structure to fragmentation tells you more about their unraveling psyche than any third-person narration could. I'm thinking of 'Flowers for Algernon'—Charlie's progress reports show his intelligence flowering, but the real gut-punch is the subtle return of old misspellings, a diary literally regressing. You don't just read about the change; you witness the handwriting of their soul deteriorate or reform on the page.
What gets me is the unreliable narrator aspect. In a standard novel, you might doubt a character's account, but in a diary, you're trapped in their self-justifications. A great diary novel lets you read between the lines they've written. The character might insist they're fine, but the entries get shorter, darker, more obsessive. The transformation is in what they won't admit to themselves, and you, as the reader, become the silent confidant who sees the truth they're hiding. It's a collaborative act of discovery between you and the empty page they're filling.