Apologies if I make less sense than usual, I've probably drunk a little too much this evening, and would normally refrain from posting as a logical consequence, except I expect I'll forget to else!
Seems to me that the 2 diploma standard students are one of the reasons to do the course! Often, on these threads, people say they find A level and GCSE music tough, because the classes can be full of people doing it for the sake of an 'easy' subject.
Additionally, the small classes that tend to exist in 6th forms are generally pretty friendly. You might find you learn as much from those students as the teacher! Might not work so well if you don't particularly like them though!
From what you say, so long as you have confidence in the teaching quality, the course has lots of potential to be fun at your school. The only final question is where it fits into your long terms plans. It certainly seems worth pursuing at A/S level, if there is no other 4th or 5th subject you are burning to study. I regret not doing one creative subject at GCSE or International Baccalaureate, as it made it such a slog.
Lastly, try and have more confidence in yourself and your musical ability! You might find a latent composition talent you never expected!