So, I typically play as Lizardmen and I take all of Lustria and everything from the Great Desert of Araby to the Southlands on ME. Within these regions there's three provinces of mountains that I give to dwarfs, usually whichever ones are local. It's really frustrating when I come to the deserts and help the local dwarfs reclaim their mountains, only for them to still treat me like I'm some foreign stranger they've never heard of even after gifting them an entire province, sometimes two entire provinces in the case of the mountain path that leads to the southlands.

I can't think of a way to turn an increase in friendliness into an exploit. The only thing is gifting and buying a region back and forth to pump up diplomacy, but really you could eliminate that by making sure the diplomacy bonus doesn't exceed what you would get for just sending them however much it would cost to purchase the region as a gift to that faction.