I think Hughes has probably lost a lot of motivation since coming to the realisation that his title propsects in the division are basically non-existant. He wont beat Fich, BJ or Alves (as proven) and certainly wont be defeating GSP.
I think his quick despatchment at the hands of BJ recently probably took the wind out of his sails quite a bit.
However, i see him taking this fight. I see no evidence anywhere to suggest that a) hughes wont be able to take Diego down, and b) that diego can sub him or get back up (enough of the time).
I think Hughes is on the decline, but whilst no longer a top tier fighter he is certainly capable of holding his own and defeating fighters below that level, which i believe Diego falls into.
Basically, i dont think Hughes is the unstoppable machine he once was, but i would bet the house on him taking this one. Its a very favourable stylistic matchup for him.