I mean, it's definitely at least intended as a play on words. And Knockturn Alley kind of works at least, because it's meant to be a dark/shady street, it's specific name being "Knockturn" rather than "Nocturn" works well because its also, functionally, directions. You knock to get into Diagon Alley, then you turn to go down Knockturn Alley. But yeah, the name Diagon Alley seems to exist exclusively for the sake of the word play, potentially even just to set up the mispronuncuation with the flu network later on the series.
I mean, it's definitely at least intended as a play on words. And Knockturn Alley kind of works at least, because it's meant to be a dark/shady street, it's specific name being "Knockturn" rather than "Nocturn" works well because its also, functionally, directions. You knock to get into Diagon Alley, then you turn to go down Knockturn Alley. But yeah, the name Diagon Alley seems to exist exclusively for the sake of the word play, potentially even just to set up the mispronuncuation with the flu network later on the series.