Out of curiosity, are you making your edits in Java, recompiling, then pulling the smali out and using it for the diffs, or editing the existing smali directly?
Depends. For things where we have platform source code, like this, I'll compile an unmodified version from the platform sources, make the change, and compile a modified version. I then disassemble both and pull out the changes for the specific class & method modified in source. That's the starting point for the smali diff.
In this case I went through the disassembled bytecode by hand to clean up line numbers, register swaps, cond_xx & goto_xx labels, etc., basically any change that's incidental and not functionally relevant. The goal is for the resulting smali diff to have as few changes against the Samsung build as possible. Also, where the code modifications create new cond/goto labels that aren't analogous to existing ones, I'll rename them to something that's guaranteed not to conflict with baksmali's labeling so there's no confusion in the future.
Finally, I walk through the final modified method by hand to mentally make sure it does what I expect it to.
For other, simpler modifications, I'll make the change in source for illustrative purposes/future documentation for myself, and patch the disassembled code by hand since that's easy enough.