Let me take this in two pieces.
>Does expansion of the universe not cause reduction in mass and energy?
It does not. It spreads out, but it isn’t reduced.
Consider a rubber balloon. If you fill it with air, it expands. The balloon becomes more spread out, but it doesn’t reduce. You still have the same amount of balloon that you started with.
>How does does the mass and energy of an expanding universe remain constant and not reduce or diffuse?
The mass and energy are still within the universe, so they do not reduce per se. Some of that mass and energy is driven beyond the observable universe by the expansion of the universe, however. So those galaxies, stars, nebulae, et cetera, do leave the ***observable*** universe.
As far as diffusing, it does. This diffusion is why the “cosmic background radiation”, the remaining visible energy released by the Big Bang is so spread out that its temperature went from billions of degrees to almost absolute zero.
The diffusion is not obvious, however, because matter clumps into galaxies. These galaxies move further apart over time, which is diffusion, but the galaxies themselves and their galactic groups are held together by gravity.
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