I did a diacetly rest for about 5 days and didn't test any significant diacetly after. It's been fermenting for about 3 weeks so it's reached FG and there's no diacetly. My understanding is that the yeast go dormant (even if I kept at high temp) so are they even active when I lower the temp to lager? If not, then why not rack after they fall out?
Isn't this the point of an airlock? To keep out oxygen and other stuff? If I decrease the temp, how is oxygen getting in through the airlock? Also, don't people cold crash in the primary fermenter? If so, why do they not have to worry about oxygen getting in?
No, lager yeast do not go completely dormant at lagering temps, at least not if you gradually lower the temp like you should (cold crashing will shock them into dormancy, which is why it is not an ideal practice if you want the real benefits of lagering). So yes, they are still somewhat active, though at a very reduced rate, at lagering temps (again, as long as you didn't shock them), which is why the benefits they bring to lagering (like cleaning up sulfur and other fermentation byproducts like diacetyl, which is probably still present, even if below perceptible levels) take a long time. THey are slow and sluggish, but still active to a degree.
It is a common misconception that lager yeast go completely dormant. even at 0*C. Below 0*C they may go dormant (see Kunze).
Re: Airlock: No, the airlock does not keep out oxygen. It is primarily to keep out airborne contaminants like wild yeasts and bacteria.
What Rob2010SS is referring to is called suckback. The airlock pushes bubbles out when there is CO2 being produced in the fermenter. When those bubbles are no longer coming out, if yo were to chill the beer, its volume shrinks. That reduction in volume creates a vacuum in the headspace of the fermenter and air (as well as some of the liquid in the airlock if you are using a 3-piece) will be sucked into the fermenter by that vacuum.
And even if there were no temperature change, the water in the airlock contains dissolved oxygen and it is constantly releasing and reabsorbing oxygen from the air. So, it effectively allows oxygen to pass into the fermenter. It's at a slow rate, but it still happens. Thus, airlocks do not (nor are they meant to) keep oxygen out of the fermenter.