The undocumented 'diags' (and 'support') user account was removed in reference to QLogic switch engineering defect #126297. Logging in as user 'diags' starts an unsupported manufacturing diagnostics utility that was used for some OEM customers. This utility is specific to 4G (SB56xx SB1404) and older QLogic switches and is not supported on 8G switches (SB580x and SB3810 series). Logging into the utility will put all ports into "diagnostics" admin state, which effectively takes them out of service.
The issue was fixed and verified in firmware version 126.96.36.199.00
While using the 'diags' account could cause a denial of service, QLogic has always recommended a best practice of having all switch management isolated to a separate network to avoid access attempts by a malicious user.