It can be put on thinly, preferably in multiple coats, but shouldn't be thinned.

Epoxy's barrier properties arise out of its cure process- cross-linked molecules that don't leave room to allow water molecules to pass through. When you introduce a thinner, the only way out for the thinner is through the coating, by evaporation. The escaping material leaves big holes (relative to water molecules...) that compromise the barrier. While an intact barrier of epoxy is very nearly 100% effective, a solvent-riddled coating is less so. That may still be good enough in some applications, where for instance a surface typically is temporarily wetted and then left to dry for a long time. Such a coating will allow the substrate to change moisture content with changing seasonal humidity, but an intact barrier can prevent even those changes.

+1 for nemochad's response. That is exactly the reason why epoxy resin forms a dimensionally-stable non-porous barrier and polyester resin shrinks and leaks. When polyester resin is catalyzed it turns solid by releasing styrene gas. When the styrene departs, the resin's volume reduces, causing it to shrink. It also leave those holes behind. That's why polyester resin is not suitable for use in S&G boats. That, and the fact that it doesn't really stick to wood all that well.

So if you're already paying the extra money for a premium high-quality epoxy resin, don't ruin it and turn it into the equivalent of junk polyester.

Laszlo