[Working Title]

(Legal disclaimer: this is just one interpretation of the material. YMMV)

A) The Nature of the Choice All in all, we know of 5 characters who have explicitly made a Choice after Namo makes it an official thing: Elwing, Earendil, Elrond (for the Elves) and Elros, Arwen (for the Men). We can make a handful of inferences from this sample group, but the most important in Dior's case is that once someone chooses mortality, the downstream bloodline is cut off from the same choice.

This is evidenced by the fact that none of Elros's descendants are recorded as choosing to be an Elf — otherwise Ar-Pharazon could have just chosen immortality without having to go to war about it. (I'm not getting into blood quantums here, that's a whole other beast I'm not equipped to talk about.) They get some hereditary traits like beardlessness and longer-but-still-mortal lifespans as a consolation prize.

Elrond chose Elfhood, and his three children also get that same privilege of choice. Elladan and Elrohir aren't mentioned making one, and presumably sail, but this implies that an Elf can effectively stall in committing to mortality indefinitely. Arwen chooses mortality after ~1500 years, and has Eldarion after (who, again, lives a mortal life without a hint of having his own Choice). This makes two for two on circumstantial evidence that descendants of a mortal Peredhel are ineligible to Choose themselves. Since Arwen is meant to be a contemporary parallel of Luthien, her situation is even more relevant, which I discuss in B.

A.5) The Unpublished Text "Now all those who have the blood of mortal Men, in whatever part, great or small, are mortal, unless other doom be granted to them; but in this matter the power of doom is given to me."

[Manwe to Earendil], The Lost Road and Other Writings Part Two: Valinor and Middle-earth before The Lord of the Rings, Quenta Silmarillion

I don't really like this take because it takes place after Dior's death (and is in an earlier version of the Quenta Silmarillion that didn't make it into the published Silm), and it runs a bit contradictory to Elrond and his children's existence for some amount of semi-immortal time. Arwen's doom of marrying Aragorn may make an exception that grants some other doom, but Elladan/Elrohir remain in a weird limbo, and they's also around for 1500+ years. Plus it feels unfair for Dior to get yanked out of the Halls mid-healing if he had been an Elf before this in canon. Plus it undermines the weight of the Choice.

Still, I would be remiss if i didn't mention it, since it's the basis for Christopher's assertion that Dior is mortal, and I want to include the guy who comes to my same conclusion.

B) Luthien, Ahead of Her Time "But the other choice was this: that she might return to Middle-earth, and take with her Beren, there to dwell again, but without certitude of life or joy. There she would become mortal, and subject to a second death, even as he; and ere long she would leave the world for ever, and her beauty only become a memory in song."

J.R.R.Tolkien, The Silmarillion, Of Beren and Luthien

That's the Choice right there! Luthien explicitly made the choice for mortality! This sets her into the trend established (post-facto) by Elros and Arwen: her children will not make a Choice.

C) Thingol's Heir The matter of succession in Doriath is confusing, to say the least. At Thingol's death, he has two competing living heirs, depending on your preferred mode of succession: Luthien (absolute or cognatic primogeniture) and Elmo (agnatic primogeniture). Instead, the throne goes to… Dior, the son of the still-living Luthien, only child of Thingol. This fits none of the above stated models of succession, which admittedly aren't the only ways to pick the next leader, but an established rulebook often helps solve crises and wars between competing claimants who all really want to be in charge before they have a chance to start.

Now what it does fit is the Tolkienverse's unspoken rule of No Girl Kings Allowed. (see: Findis is skipped over in Aman for Finarfin, Turgon preferring Maeglin as regent when he left for the Nirnaeth, the absence of any claim from Idril to the High Kingship of the Noldor after Turgon's death (and skipping over Earendil as well, but there were bigger boats to sail for that kid)).

Dior, on the other hand, is outright granted the epithet of Eluchil, or "successor". Whether this was a shrewd political move by Luthien to assert her mortal son's legitimacy in the succession to an almost exclusively elven kingdom is anyone's guess. But either way, he is explicitly noted in the Silmarillion as "Dior Thingol's heir" despite the lack of any proof positive that he'd been trained in statecraft by his grandfather or even been to Menegroth. Very Hanoverian of him, if that was the case. At least he solidified his claim by marrying Nimloth, a noblewoman herself by her relation to Celeborn.

And, at the end of the day, while Doriath was largely an elven kingdom that had historically been run by an Elf and his wizard wife, I think they kind of ran into an Air Bud situation, where there weren't any stipulations that a mortal can't be King. With the political situation at the time (Menegroth recently sacked) there may have been little resistance to an incoming mover and shaker who promised to fix things up.

Also in a very Hanoverian move, I think the title of King of the Sindar did not pass to Dior with the Kingship of Doriath. It's never mentioned in his context, and after Thingol dies the title mostly disappears. It seems to be a pretty empty claim anyways, largely used to assert dominion over lands and people he held no practical sway over on the continent. Maedhros even bullies him for it. So Dior is the King of the fealty of Doriath, but does not call himself king of the people-group that is the Sindar; it's an interesting inversion to late First Age Gil-galad, who is King of the Noldor people-group, but lives in the Havens/Balar that are emphatically Cirdan's lands.