Implementation of block_diag

[alt-shreya]

PR Description

Related Issue

Closes #27198

Checklist

• [x] Did you add a function?
• [x] Did you add the tests?
• [ ] Did you run your tests and are your tests passing?
• [ ] Did pre-commit not fail on any check?
• [ ] Did you follow the steps we provided?

Socials

@discountdali

[alt-shreya]

To Do

• [ ] Resolve failing tests
• [ ] Implement block_diag for all backend APIs
• [ ] Write tests for block_diag for all backend APIs