What actually happened with Diavolo?
What I understood from the show was that Giorno's Gold Experience Requiem put Diavolo in a state where he constantly had to experience death over and over again forever. He would die in a particular scenario, wake up in another place and experience his death in that place as well and then proceed to wake up in another place... and so on. From the Diavolo page of the Jojo wiki under the section Final Moments, it is stated that


  Due to the ability of Gold Experience Requiem, Diavolo is trapped in
  an infinite death loop; He continues to experience death over and over
  for eternity due to dying and subsequently returning to point zero
  (before his death), starting with drowning in the nearby river,
  followed by being stabbed to death, autopsied alive, and hit by a car.
  Panicked in anticipation for where the next source of his never-ending
  fatality is going to come from, the last of what is seen of Diavolo is
  him begging a harmless child to get away from him.