Bathtub valve that changes flow to shower head leaks
I take it from your description that the diverter is in the tub spout and so it leaks out the spout into the tub. The leak is not going into the wall, right? This type of diverter does leak much more than the diverter inside the wall, but the leak is of no real consequence.

But if the leak is really excessive or it bothers you, then AFIK the only solution is replacement of the spout. AFIK there is no replaceable seal inside Sometimes it's metal-on-metal in the spout and the sealing surfaces wear with use.

See video.