A rock that size would certainly transform Mars' surface and likely release a very large amount of its subterrainian water. After a couple years the dust would settle and a new planet would emerge. One much friendlier to life earth life with oceans, lakes, rivers and likely even rainfall.

Pushing Diemos toward the surface of Mars wouldn't be too difficult I would think. Consider the way DART moved Dimorphos. Upscale that with a few nukes and presto. A subtler way might to to place some thrusters on the far side of Diemos and push it towards Mars.

Unfortunately, I don't see how any government could pull it off with all the scientists and planetary environmentalists (they're coming) who would make a huge stink about it. Even corporations would be hard pressed given the costs and questionable ROI of such an undertaking.

The only chance of such an idea happening would be if some evil trillionaire genius did it secretly.