In the phrase "diamond cut diamond", why do we use "cut" instead of "cuts" since the subject is singular?
Well, many English proverbs are grammatical unanalysable and unchangeable.
"Diamond cut diamond" is one of the examples. Maybe, it has something to do with the so-called English usage, I suppose.
This is not an English expression I have ever heard of.
Diamond Cut Diamond is, however, an Indian fairy tale. Andrew Lang included it in The Olive Fairy Book.
The only other possibility I can think of is:
a diamond-cut diamond, indicating how a rough diamond was cut and shaped by another diamond.