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The only purpose of the diode is to stop the neutral light coming on every time you pull the clutch in.You can bypass the diode with a bit of wire but you’ll get the above issue. You still shouldn’t be able to start the bike with the stand down and clutch pulled in if it’s wired properly.
On mine the diode is behind the left side panel where all the electrickitry sits, but that is a European CB500K2.