Glad I could clarify and help prevent would would have been a mistake. Yes, the rules for insertion of pegs relate to the diameter of the peg, and not what it fits in. You probably won't gain anything with a longer post that meets the minimum guideline (unless the frame calls for it) since the rule already has a safety margin built in. But if you're upgrading anyway, going longer can't hurt (it just won't help either).

BTW- your mtn bike is a ood example of why I think minimum post mark on the frame is important. These long tube models are the ones dealers see coming back broken and customers innocently complaining that the post was within the required depth.