Walsh issued Diomande a straight red card towards the end of Rangers' 3-1 victory over Dundee United for an altercation with Kevin Holt. The specific reason for the red card was not immediately evident.
The referee was advised to conduct an on-field review but stuck with his decision, much to the confusion of Philippe Clement, who said Rangers will appeal.
"It's embarrassing," said former Rangers striker Boyd. "I think sometimes, when you go to the monitor, you can be too stubborn. Sometimes you've just got to admit you got it wrong and Nick Walsh should have.
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Replays showed Diomande's right hand may have made contact with Holt's face as they contested possession of the ball but Boyd added: "It's a little bit inconclusive, even if he slaps him.
"There is no excessive force in that. There's no brutality at all.
"I cannot understand. Walsh is right there and from his angle it might look as if he's caught him.
"It's inconclusive. I'm watching it about 40 times here and we're still arguing about it, which tells us that it's not conclusive."
Former Celtic striker Sutton had a different view, saying: "You can't slap people in the face. You just can't do that.
"He does slap. I think he does catch him. Nick Walsh was right on the spot there so I just think, while we can criticise Nick Walsh, I think that the player has to show discipline himself and now he's going to miss a couple of games.
"You can't just go around slapping people. If you don't send him off for that, you're just saying all games should be a free-for-all."
"I totally don't understand," Rangers boss Clement told after the game. "We're going to appeal it also as a club. The VAR was clearly also in that opinion, otherwise, they don't ask the referee to come to the screen.
"My opinion is clearly it's totally not a red card. If that's a red card, then every game there will be three, four, five red cards.
"I think my player gets attacked in that moment and gets pushed and he has a small reaction with his hand without even touching the opponent. They can have both maximum yellow, but giving a red card for that? That's incredible."