PGMOL, the body in charge of refereeing in England, admitted that Díaz had a goal incorrectly ruled out for offside after the VAR, Darren England, and assistant VAR, Dan Cook, wrongly thought the goal had been given by the on-field officials. The striker thought he had put Liverpool in front in the 34th minute after he latched onto a through-ball from Mohamed Salah and scored, only for the flag to go up for offside.
The VAR team incorrectly thought the onfield decision was "goal," quickly identified that Díaz was onside and told the onfield team "check complete" to confirm the goal. But when referee Simon Hooper was told this, he understood the assistant's offside decision as being correct. That meant that rather than the decision being changed to goal, it remained disallowed.
England was due to be the fourth official for Nottingham Forest vs. Brentford on Sunday and has been replaced by Craig Pawson. Cook was due to be the assistant for Monday's game between Fulham and Chelsea, but he too has been stood down and replaced by Eddie Smart.
A statement issued by the referees' body on Saturday read: "PGMOL acknowledge a significant human error occurred during the first half of Tottenham Hotspur v Liverpool.
"The goal by Luis Diaz was disallowed for offside by the on-field team of match officials. This was a clear and obvious factual error and should have resulted in the goal being awarded through VAR intervention, however, the VAR failed to intervene. PGMOL will conduct a full review into the circumstances which led to the error."
Later on Sunday, Liverpool issued a statement saying that the incident undermined the "sporting integrity" of the competition.
"It is clear that the rules of the game were not applied correctly, which undermined sporting integrity," Liverpool said in a statement on Sunday. "It is therefore unsatisfactory that sufficient time was not given to allow the correct decision to be made and that there was no subsequent intervention."
Liverpool manager Jurgen Klopp was furious in his postmatch news conference on Saturday.
"Who does that help now?" he said. "We had the situation in the Manchester United-Wolves game. Did they get points for it? It doesn't help.
"Nobody expects 100% correct decisions, but when VAR comes in, it should become easier. The decision was made really quick and it changed the momentum of the game."
Spurs boss Ange Postecoglou added: "I've never really been a fan of it [VAR]. It complicates areas of the game that I thought were pretty clear in the past. We have to deal with it.
"The biggest problem we have is that no form of technology will make the game errorless. We always accepted that mistakes were part of the game, people are human beings, but many parts of out game aren't factual so officials will make mistakes the same as players and managers make mistakes.
"If we have such a high bar, invariably it's going to fail."