It registers in all directions. As was mentioned earlier you can actually attack with the Fsmash and slant it up or down, try it with Samus.
I think the reason your asking this question is because there are only 4 attacks that can be performed out of the cstick. This doesn't mean te diagonals don't register, simply that if they register they must register as one of these 4 attacks OR as a DI.
The Cstick can be used to ASDI, or Automatic Smash DI. This means the Cstick will register a DI in ANY direction, not just where the notches are. This is also true for the control stick, the notches are more a guide than a law. Try using Fox's UpB and you'll notice that you can get angles that are not limited to simply the 8 notches on the control stick. This is especially important for Pikachu/Pichu's UpB recover.