Bathtub Faucet - Can't stop the water
You should be able to turn that brass colored knob counterclockwise and remove it from the stem or have the stem turn too and remove it from the  diverter plate which should then drop out of the spout. Then examine it for any signs of corrosion or cracking. If damaged, a trip to a plumbing supply store might just do the trick for a replacement.
You have to be semi gentle in turning the knob.... you don't want to shear it off, maybe squirt some CLR or vinegar on the stem threads to dissolve any rust/corrosion.