Set Appliance State:

Isolate Mains Power to appliance as per TOPs P4
Remove the diverter valve actuator
(To remove actuator, remove securing pin
before pulling away from diverter body)

Observation:

Press the spindle of the diverter valve in with a screwdriver.
It should move in freely by approximately 7mm until it is flush with the brass.
Release the spindle and it should spring back freely by approximately 7mm.
Does the diverter valve spindle behave as described above?