According to it’s description the trait should prevent artifacts from being decayed and spells from being sealed.
In my experience it only prevents spells from being sealed.
Spells like lycanthropy don’t get sealed after use, so I can confirm that that part of the trait is working properly.
But it neither prevents the decay spell nor the subversion and crumble traits from working as they would without diamond attunement.
I’ve tested this with a diamond paragon as well as with an artifact with the diamond attunement trait.
In tried various scenarios and came to the conclusion that diamond attunement does not prevent decay in any way and it’s not just a visual bug, as all effects of the affected artifact are lost.
I hope to have described the issue in an understandable manner and I’d be happy if you could clarify if this is intended or a bug.