Well, from my very limited comprehension of diffusion models, they apply to fixed length structure, mostly from a continuous space. Maybe a way to make them work with tree structures could be found - that's no trivial task

Autoregressive LLMs don't usually work on tree structures, they work on capped-length linear token sequences, which are isomorphic to fixed-length sequences.

I'm not sure why you think working on tree structures rather than fixed length sequences would be necessary for diffusion language models—which, again, actually exist; aside from Mercury which is proprietary, there is also LLaDA: https://ml-gsai.github.io/LLaDA-demo/