First, we define diagonal, as it relates to this challenge:

Diagonal - connecting two nonadjacent corners of a plane figure or any two corners of a solid that are not in the same face; "a diagonal line across the page"

The diagonal composition can slope left or right; vertical, horizontal, square, rectangle - your choice.

In this challenge, the idea is to take a picture of the subject "on the diagonal" - not tilt your horizon! Rather than do that, try to change your position and/or DOF to mitigate the impact of it. Tilted horizons, unless extremely out-of-focus, usually distract from, rather than enhance, the subject at hand: "On the Diagonal" composition. If possible, try to avoid any strong lines, objects, etc. that will take away from the diagonal composition. If it's a strong composition, a little deviation is barely noticeable.