Ok i've reread the chapter and i've found a few issues with this
Diavolo seems to be in a state of bewilderment. So idk if we can take his words seriously here. How can we take them seriously if he himself is questioning reality? I mean heck he doesn't even know what he's looking at.
And even if we do listen to his words, it contradicts the ability of time erasure. No matter what happens, he cannot interact/attack inside of his TE. So if the TE was still active, why would diavolo try to interact inside of it? it doesn't make any sense at all and contradicts his very own ability