Diaper-Head is a slur used to describe Arabs in a derogatory way. Same idea as Towel-head or Rag-head.
The word Diaper-Head is a racial slur that has been used historically to degrade and dehumanize arabs. The word is still used by some people for this purpose, and it is seen as offensive and hurtful to arabs. If you are unsure about whether or not it is appropriate to use the word Diaper-Head, it is best to err on the side of caution and avoid using it in any situation.