It's used when two characters with a large power gap between them are being compared.
Ex) Juubi Jin Madara defeats Temari neg diff.
When someone is so strong that no difficulty to beat the opponent is such belittling that negative difficulty meaning below no difficulty is the appropriate term used in these situations.
For example I can beat up an ant Neg Diff, there is no challenge that saying no difficulty is too much. Negative is the way to go.