A key to understanding AGN?
No, I don't think it's a "key" to understanding AGNs at all; unification of AGNs - that's the most important key to understand them.
Just have a look at Fig.1 - I can see *no* correlation between the star-formation rate and the AGN luminosity for QSOs (open circles) alone, can you? On the other hand, for Sy galaxies (filled circles), the scatter in star-formation rate is reeeeally large plus, again, I can see no correlation.
So I dare say this pseudo HR diagram is simply an illusion resulting from putting both these classes of AGNs into one diagram. That alleged "diagonal strip" is just an effect of large scatter for QSOs combined with even larger scatter for Seyferts.
-- Andrzej